Definition: Federal Reserve Board

Federal Reserve Board

The Federal Reserve System is also independent, and acts as the nation’s central bank. The Federal Reserve Board monitors bank interest rates and how the US dollar is circulated. Some believe it is just as powerful as a cabinet department, because by controlling interest rates, they have a big say on price inflation and deflation. With such power, it’s no wonder why they are independent. We’ll look more at their actions regarding monetary policy in the public policy chapter. 

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