From 11:00PM PDT on Friday, July 1 until 5:00AM PDT on Saturday, July 2, the Shmoop engineering elves will be making tweaks and improvements to the site. That means Shmoop will be unavailable for use during that time. Thanks for your patience!
We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.
© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Federal Reserve System


The Federal Reserve is the central bank of the U.S. You can’t just waltz in and open an account at The Fed, though—this bank is only for the federal government and for other banks.

The Fed has a big impact on the economy because it decides what interest rates will be and controls how much money is out there in the economy. The Federal Reserve also sets up all sorts of rules for other banks. It's like the granddaddy of all banks, and other banks have to follow its lead.