Federal Reserve

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Federal Reserve: A group of economic policymakers and forecasters, the Federal Reserve Board sets an interest rate based on economic conditions. The Fed, as the Federal Reserve is more popularly called, sets interest rates which form the basis of monetary policy.

By increasing the Federal Funds rate, the Fed makes borrowing more expensive, which reduces spending in the economy and discourages inflation. When economic growth slows, the Fed decreases the Fed Funds rate in order to increase borrowing and stimulate growth.

The Fed pays no federal (national) or state taxes, which makes it unique among private corporations.

Thomas Jefferson, a "founding father" of the United States of America, once said "If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around the banks, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."