The Federal Reserve: The Fed's Dual Mandate

My article starts off with a brief overview of what will discussed within the article. The first focus in the article is the Fed’s Dual Mandate. Dating back to the nineteenth century, when the Federal Reserve had yet to exist, there was no source to serve as a lender of funds in case of any last resorts. Which caused a series of panics and debts. Therefore, congress, and former President Woodrow Wilson signed the 1913 Federal Reserve Act. This law is what created today’s Federal Reserve. “Historically, the Fed’s monetary policy has been governed by a dual mandate: first, to maintain stable prices, and second, to achieve full employment…”(McBride and Sergie, 2018), which is often debated by economists, although is considered to a mean unemployment

The Fed was created in December of 1913 to provide a safer, and more flexible monetary and financial system. The Central Bank is in Washington, D.C. near the U.S. Department of state. The Reserve has five general functions. They are to maintain effective operation of the economy, and the public interest. The bank conducts monetary policy, promotes stability of the financial system and minimizes while containing systemic risks, promotes safety of individual financial institutions, fosters payment and settlement systems safety, and promotes consumer protection and community

The monetary policy is managed by short-term interest rates and the ability and cost of credit in the economy. The policy can impact many things such as interest rates, stock prices, wealth, and currency exchange rates. The Reserve has progressively changed with the evolving of the U.S. and global financial system. When a financial crisis in 2007-2009 and recession showed the failures in the systems the Dodd-Franck Act and the Consumer Protection Act of 2010 were enacted and gave the Fed new responsibilities in hopes of promoting financial system stability. To help promote the safety of financial institutions the federal reserve regulation and supervision over the banks and institutions. The U.S. Dollar payment and settlement system runs on payment instruments and methods, systems, and institutions that are constantly changing. The Reserve provides currency and operates with few elements of this system. This system works every level of exchanged currency to warrant proper functioning of everyday transactions. The reserve commits to ensuring fair consumer financial marketplace and an effective community development. Therefore, the Reserve preforms functions to implement and improve the