DEFINITION of 'Federal Agencies'

Special government organizations set up for a specific purpose such as the management of resources, financial oversight of industries or national security issues. These organizations are typically created by legislative action, but may initially be set up by a presidential order as well. The directors of these agencies are typically selected by Presidential appointment. A number of these organizations issue securities such as stocks and bonds that have been historically popular with investors.

BREAKING DOWN 'Federal Agencies'

At last count, there were over 125 different government agencies and commissions, only a small portion of which directly affect investors. Some organizations, such as the Federal Deposit Insurance Corporation (FDIC) and the Government National Mortgage Association (GNMA) have their operations explicitly backed by the U.S. Treasury. Other organizations, such as Fannie Mae, Freddie Mac, and Sallie Mae are only provided with an implied guarantee from the U.S. Treasury.

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