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Federal Reserve Act

The law that established the Federal Reserve System and defines its powers and responsibilities.

Earnings on balances (Interest on Reserves)

The interest rate the Federal Reserve pays to banks on the money they hold in their accounts at the Fed. This is a tool the Fed uses to influence overall interest rates in the economy.

Monetary policy

Actions taken by a central bank, like the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals like price stability (low inflation) and maximum employment.

Reserve balances

Funds that banks hold in their accounts at the Federal Reserve, often in excess of what they are legally required to hold.

Federal Reserve (the Fed)

The central banking system of the United States, responsible for conducting monetary policy, supervising and regulating banks, and maintaining financial stability.