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The Federal Reserve System is the central bank of the United States. It regulates monetary policy and supervises the nation’s banking system.

The Fed includes the central Board of Governors and 12 regional Federal Reserve Banks.

Among the Fed’s main duties is its responsibility to make sure the money supply doesn’t grow too quickly or too slowly. It uses monetary policy to control that growth. The Fed can change reserve requirements, which are the percentages of deposits that banks must retain. It can also change the interest rate, called the discount rate, paid by member banks when they borrow money. Or it can buy or sell Treasury securities to increase or decrease the money supply.

The Fed’s other duties include regulating banks and protecting the credit rights of consumers. It maintains the financial system’s stability, and it provides the U.S. government with financial services.

The Fed works independently from the government, which uses fiscal policy to regulate economic conditions.

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