The Federal Reserve is the most powerful financial institution in the US

The Federal Reserve is the central bank of the US

No institution wields more power in US finance than the Federal Reserve—but opinion polls indicate that most Americans don't know what it does. Curious about the country's central bank? 1440's got your breakdown of how the Federal Reserve works.

The Federal Reserve follows the health of the US economy by tracking the money supply

That includes all of the physical and electronic money in circulation. It tracks not only US coins and bills, but also the money that moves through bank deposits. The Fed uses metrics called trackers to follow different types of transactions through the money supply.

The Federal Reserve's decisions can impact your money

Car loans, mortgages, business investments—these and more can be drastically impacted by the adjustment of the Federal Reserve’s federal funds rate. Alternatively, savers can earn higher, low-risk yields on their savings when the Fed’s target rate is higher.

The central bank was designed to operate free of short-term political influence to prevent the Fed from making disastrous policy decisions

Although the Fed Chair and the six other Governors of the Board are appointed by the US president and approved by Congress, the Fed is not funded by congressional appropriation, and its board members are appointed to lengthy 14-year terms.

How much power does the Federal Reserve really have?

Although mechanisms for transparency exist, it wouldn’t be difficult for the incredibly powerful institution to go rogue in the wrong hands. In this podcast episode, analysts game out how such a scenario would go.

Congress mandated that the Fed streamline check payments

When it was first created in the 1910s, the Federal Reserve System became a crucial link between the nation's regional banks. The increasing number of checks used by the thousands of banks across the nation required a central operator, and the Fed was uniquely positioned to help. Learn more about the role the Fed played in the history of checks.

The US dollar is the most widely circulated currency in the world, and is involved in nearly 90% of global transactions

The global economy runs on US dollars

Nearly 90% of international trade in 2019 was processed in US dollars. It's not only the most circulated currency in the world but also considered one of the most stable.

Central banking in the US has had a fraught political history

That history includes its doomed early efforts in the First and Second National Banks, as well as its failure to address the worst financial period in US history, the Great Depression.

While the Fed is involved in issuing new generations of cash, the way it adds to the money supply does not involve printers

The majority of money in circulation is credit, not cash. This credit, which acts similarly to direct deposit from employers, is added to bank accounts by the Federal Reserve. The Fed also employs tools like the federal funds rate and open market operations to expand or contract credit.

See a ranking of the best (and worst) Federal Reserve Chairs since 1914 out of the 16 men and women who have held the office since.

The Federal Open Market Committee is a 12-member voting body that sits within the Fed

The committee meets every six weeks to decide whether to maintain, raise, or lower the federal funds rate, which determines all lending costs in the US. It consists of the seven permanent central board members, the president of the New York Fed, and four rotating heads of the other 11 regional banks.

The idea for the Federal Reserve was conceived in secret in 1910—with bankers donning duck hunt gear for disguise while traveling to a remote country club on Georgia's Jekyll Island

US inflation can generally be split into to two periods—before and after the Federal Reserve

A central bank itself does not mean significant inflation will occur, but economists generally point to factors like two world wars and the printing of money to finance the US federal deficit as primary drivers of price increases.

The best (and worst) Federal Reserve chairs since 1914

The Federal Reserve Act's foundation was laid in a secretive meeting at the world's most prestigious club

Republican Sen. Nelson Aldrich of Rhode Island organized a highly secretive meeting of the minds at the world’s most prestigious club on Jekyll Island, Georgia, where a who’s who in the financial world hashed out details over the course of a week.

In the aftermath of the 2008 financial crisis, the Fed began a program of quantitative easing

This program injected trillions of dollars of new money into financial markets to stimulate the economy. The move catalyzed an 11-year bull run and was repeated during the pandemic. Experts argue such power could worsen wealth inequality and contribute to bubbles in housing and finance.

The United States is the world's oldest continuously operating federal system under a written constitution

The US pioneered federalism in the late 18th century, and many countries later adopted federal systems to manage conflict and share power. This resource features interactive maps that trace the spread of federal systems worldwide from 1900 to the present.

Over three-fourths of US debt is held by domestic and foreign investors

Of the domestic investors, the Federal Reserve is the largest holder. And, of the foreign investors, Japan is the largest holder, followed by China.

Visualize the balance sheets of US banks

The US banking industry is the most profitable in the world, with loans and leases driving the lion’s share of those profits. In fact, at the end of 2022, 53% of all bank assets fell into the loan and lease category. This rich visualization makes sense of that and highlights how traditional banks operate in stark contrast from their not-for-profit credit union peers. See it here.

The United States is one of only around two dozen countries with a fully federal system of government, in which power is divided between national and state governments.

The New Deal shifted economic and social authority to the federal government

Franklin D. Roosevelt's response to the Great Depression expanded federal power through economic regulation and social welfare programs, permanently reshaping federalism by shifting responsibility for financial security to Washington while leaving states to administer many of these programs.

The Constitution gives Congress sweeping control over the federal budget

Article I, Section 8's Spending Clause authorizes Congress to tax, pay debts, and promote the "common Defence and general Welfare," making it one of Congress's most powerful tools—and the constitutional foundation of federal budget control.

The United States currently ranks number one for countries that enable the most financial secrecy

Financial secrecy refers to complex systems that make it easy for people and companies to hide assets. High levels of financial secrecy are associated with illegal activity, like drug trafficking and money laundering. Lax regulations around reporting who owns trusts, real estate, and businesses impact the United States' global financial secrecy ranking.

How JPMorgan Chase became America's biggest bank

From the railroad and steel consolidations brokered by John Pierpont Morgan on Wall Street more than a century ago, to the repeal of Glass-Steagall, the financial crisis, and Jamie Dimon’s leadership, J.P. Morgan Chase has been at the center of finance for more than a century.

The man who gave 9 people power over everyone

In the US, nine unelected justices can shape some of the most personal and political parts of our lives. But the Supreme Court wasn't always this powerful. When it was first written into the Constitution, it had no clear authority, no real role, and little public respect.

How the Rockefellers' wealth evolved over time

The Rockefellers built one of the most powerful business empires in US history. By the early 1900s, their company, Standard Oil, controlled over 90% of the US oil market.

The mysterious Fort Knox houses much of America’s gold reserves

This fortified vault, built in 1936, is part of the US Mint, but it doesn’t create any currency. Only a presidential order can open Fort Knox—there has not been an audit of its contents since 1953.

The power and influence of the American presidency have expanded significantly over time—far beyond what the founders envisioned.

The $1 bill hasn’t been redesigned in over 60 years

From a counterfeiting and forgery perspective, this makes the $1 bill one of the least secure American banknotes. In this video, the Wall Street Journal sits down with a leading currency expert to explore the techniques used to keep cash safe and figure out what's going on with the $1 bill.

Roughly 43 million US borrowers owe roughly $1.7T in student debt, the second-largest source of consumer debt behind mortgages.

The US Constitution is widely regarded as the longest-standing written national constitution still in force—see how it has influenced rights worldwide.

The rivalry between Alexander Hamilton and Thomas Jefferson centered on federalism—the question of how much power the federal government should hold relative to the states.

Iran's Revolutionary Guard Corps is independent of Iran's regular army and is one of the most powerful and influential military-political organizations in the Middle East.

The USPS spent $3.97B in 2024, accounting for .058% of the federal budget.

Discover the catastrophic consequences of a failure of the US electrical grid—something that is more likely than many Americans think.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

The Nasdaq's 'Magnificent 7' companies are responsible for roughly 40% of the Nasdaq 100 index's gains, while the remaining 93 companies account for the other 60%.

How Amazon operates a 'flywheel' business model, a self-reinforcing cycle that drives continuous growth

While the sun's gravity keeps the planets in orbit, their gravity also pulls on the sun, causing it and everything else in the solar system to orbit around a mutual balance point called the barycenter—the true center of the solar system.

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

For centuries, Niagara Falls has been a magnet for daredevils seeking to conquer one of nature's most powerful wonders, with its 200-foot drop and water rushing at 32 feet per second with 280 tons of force.

Long before Major League Baseball began allowing instant replay for balls and strikes, an umpire reluctantly used the technology to determine whether a hit was a home run, a move that inadvertently ushered in a new era for the sport.

Animal phobias are likely the most common type of phobias, followed by an extreme fear of heights.

The distributor behind 'Rocky Horror' pulled the film from its scheduled national release, believing it would be a failure, though it eventually amassed a dedicated fanbase through midnight showings, a trend that continues over 50 years later.

Studies suggest when you sleep is as important as how much you get, and syncing with your circadian rhythms may lead to less fatigue and improved long-term health outcomes

The Mona Lisa's celebrity status and repeated restorations have obscured what made the painting so revolutionary for its time

Tattoos remain visible on your skin thanks to immune cells called macrophages