Why the Federal Reserve Controls So Much of the Economy | WSJ
The Wall Street Journal・9 minutes read
The Federal Reserve manages US currency circulation, has the power to print money, and plays a vital role in the economy by making key decisions. Established in 1913, it consists of 12 regional banks, faced criticism for its role in the Great Depression, and gained credibility through independent actions like raising interest rates to nearly 20% under Paul Volcker.
Insights
- The Federal Reserve, established in 1913, is responsible for managing US currency circulation and has the authority to print money, impacting economic decisions like interest rates.
- Congress granted the Federal Reserve a dual mandate in 1978, emphasizing stable prices and maximum employment, which the institution has maintained through politically independent actions, such as significant interest rate hikes under leaders like Paul Volcker.
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Recent questions
What institution manages US currency circulation?
Federal Reserve
What meme from 2020 references money printing?
Money printer go brr
When was the Federal Reserve created?
1913
What mandate did Congress give the Federal Reserve in 1978?
Stable prices and maximum employment
Who raised interest rates to nearly 20% under the Federal Reserve?
Paul Volcker
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Summary
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Federal Reserve: US Currency Management and Influence
- The Federal Reserve, not the Treasury, distributes US dollar bills and manages currency circulation.
- The Federal Reserve has the power to essentially print money, as seen in the meme "Money printer go brr" from 2020.
- The Federal Reserve plays a crucial role in the US economy, making decisions like raising interest rates.
- Created in 1913, the Federal Reserve is the US Central Banking System with 12 separate banks across the country.
- The Federal Reserve faced criticism for exacerbating the Great Depression by keeping money circulation tight.
- In 1978, Congress gave the Federal Reserve a dual mandate to focus on stable prices and maximum employment.
- The Federal Reserve gained credibility through politically independent actions, like raising interest rates to nearly 20% under Paul Volcker.
