How is the US Federal Reserve Structured?

U.S. Monetary Policy: An Introduction

This site provides an introduction to U.S. monetary policy as it is currently conducted by answering a series of questions:

How is the Federal Reserve structured?
What are the goals of U.S. monetary policy?
What are the tools of U.S. monetary policy?
How does monetary policy affect the U.S. economy?
How does the Fed decide the appropriate setting for the policy instrument?

U.S. monetary policy affects all kinds of economic and financial decisions people make in this country—whether to get a loan to buy a new house or car or to start up a company, whether to expand a business by investing in a new plant or equipment, and whether to put savings in a bank, in bonds, or in the stock market, for example. Furthermore, because the U.S. is the largest economy in the world, its monetary policy also has significant economic and financial effects on other countries.

The object of monetary policy is to influence the performance of the economy as reflected in such factors as inflation, economic output, and employment. It works by affecting demand across the economy—that is, people’s and firms’ willingness to spend on goods and services.

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This site is for informational purposes only. It is not sponsored or in any way affiliated with the government. If you are in need of a mortgage loan, consult with a licensed mortgage professional. All fair housing and equal housing opportunity laws apply when applying for a mortgage or buying a home. Copyright 2012.