The Federal Reserve and the Interest Rate

Introduction

The Federal Reserve System was founded in 1913 b the U.S. Congress with the purpose of exerting control over the currency and give stability to the monetary system in the United States. The Federal Reserve (Fed) acts as a de facto central bank of the United States.

The Fed fulfill three primary roles, which are controlling the monetary policy (by issuing and lending currency to the banking system), along with regulating the banking system and all the functioning of the financial services in the U.S.

Currently, the Federal Reserve is run by the Board of Governors (or what is sometimes referred as the Federal Reserve Board) that is composed by seven governors which are first appointed by the president and require confirmation from the Senate. The service term for each of the governors is 14 years. The board is led by the vice-chairman and chairman, which are appointed by the president of the U.S. for a term of 4 years (and they can be renewed under certain circumstances).

The current chairman is Janet L. Yallen, and the vice-chairman is Stanley Fischer. The other current governors are Jerome H. Powell, Lael Brainard and Daniel K. Tarullo. Chairman Yellen started her term on February 3 ^rd , 2014 and she was appointed by President Barack Obama.

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