The Fed

The Fed means the Federal Reserve, which is the central bank of the United States. In simple terms, the Fed helps manage the U.S. economy by influencing interest rates and the supply of money. The Fed is closely watched because its decisions can affect borrowing costs, inflation, jobs, and financial markets. When the Fed raises interest rates, borrowing usually becomes more expensive. When the Fed cuts interest rates, borrowing usually becomes cheaper. For example, if inflation is too high, the Fed may raise interest rates to slow spending and reduce price pressure. The Fed does not directly control every price, job, or stock market move. It influences the economy mainly through monetary policy.