What is “The Fed”? (Part 1)

If anyone has picked up a financial paper or read the business section lately, you have become accustom to reading about the FED, Discount Rates, Overnight Rates, and Open Market Operations. So what are these things and how do the activities of the Fed affect me and you.

Formally known as the Federal Reserve, the Fed is the gatekeeper of the U.S. economy. The Fed regulates financial institutions, manages the nation’s money and influences the economy. By raising and lowering Interest rates, creating money and using a few other tricks, the Fed can either stimulate or slow down the economy.

Source: HowStuffWorks, Lee Ann Obringer

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