What is the federal reserve? how does the fed affect banking?

The Federal Reserve System, often denoted to as the Federal Reserve or just "the Fed," is the central bank of the United States. It was made by the Congress to offer the nation with a safer, more flexible, and more steady monetary and financial system. The Fed can produce or shrink the money supply by purchasing or selling U.S. Treasury bonds on the open market. These activities in turn affect a bank's profitability. A robust money supply associates to more money to lend and earn interest on, while a shrinking money supply curtails a bank's moneymaking activities.

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