The Federal Reserve System, commonly known as "the Fed," is the central banking system of the United States, established on December 23, 1913, by the Federal Reserve Act to stabilize the monetary system following a series of financial panics. Functioning as an independent central bank, its core mission, often termed the "dual mandate," is to maximize employment and stabilize prices, in addition to moderating long-term interest rates.

The system is governed by a presidentially appointed Board of Governors and includes twelve regional Federal Reserve Banks, with the powerful Federal Open Market Committee (FOMC) setting monetary policy by adjusting the federal funds rate to influence U.S. economic activity. Beyond this, the Fed supervises banks, maintains financial system stability, and provides financial services, remitting significant annual profits—for example, $86.9 billion in 2020—to the U.S. Treasury. Despite its crucial role, the Federal Reserve has faced criticism regarding its approach to inflation management, transparency, and its perceived role in economic downturns.