Federal Reserve System

noun

: the central banking system of the U.S. consisting of 12 districts with a Federal Reserve bank in the principal commercial city of each district

Examples of Federal Reserve System in a Sentence

Recent Examples on the Web

Auto loan 30-day delinquency rates have risen considerably in recent years, according to a Thursday note from the Board of Governors of the Federal Reserve System. —Michael Wayland, CNBC, 30 Sep. 2024

On July 1, 2024, the Supreme Court changed that rule in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, so that the limitations period does not start until the plaintiff is actually injured by an agency’s rule. —John Quinn, Forbes, 19 Sep. 2024

In July 2024, the U.S. Supreme Court's decision in Corner Post, Inc. v. Board of Governors of the Federal Reserve System expanded the ability of plaintiffs to sue federal agencies. —Tonya Evans, Forbes, 16 Sep. 2024

On Monday, the court ruled along familiar 6–3 party lines in Corner Post Inc. v. Board of Governors of the Federal Reserve System, in a decision that creates new opportunities for companies to attack federal regulations years after they’re put in place. —Molly Taft, WIRED, 6 July 2024

Roach indicated in his commentary that excess savings peaked at $2.1 trillion in August 2021, citing data from the Federal Reserve System, the Bureau of Economic Analysis and other sources. —Russ Wiles, The Arizona Republic, 16 June 2024

The Federal Reserve System maintains high interest rates to cool off the economy and bring down inflation, but those interest rates make home ownership more difficult and affect businesses, which often raise the prices of goods and services to maintain profits. —Dan Walters, The Mercury News, 8 June 2024

Through its control over the international payment service SWIFT and the influence of the U.S. Federal Reserve System, Washington has been able to pressure adversaries and impose financial sanctions with global reach. —Matthias Matthijs, Foreign Affairs, 13 Apr. 2020

The budget blames stubborn inflation and the high interest rates imposed by the Federal Reserve System to tame inflation for California’s slowdown, but economies of other states have experienced the same factors and prospered despite them. —Dan Walters, The Mercury News, 21 May 2024

Word History

First Known Use

1915, in the meaning defined above

Legal Definition

Federal Reserve System

Agency

central banking authority of the United States. It acts as a fiscal agent for the U.S. government, is custodian of the reserve accounts of commercial banks, makes loans to commercial banks, and is authorized to issue Federal Reserve notes that constitute the entire supply of paper currency of the country. Created by the Federal Reserve Act of 1913, the system consists of the Board of Governors of the Federal Reserve System, the 12 Federal Reserve banks, the Federal Open Market Committee, the Federal Advisory Council, since 2010 a Community Depository Institutions Advisory Council, since 2012 a Model Validation Council, and since 2015 a Community Advisory Council; there are several thousand member banks. The Board of Governors of the Federal Reserve System determines the reserve requirements of the member banks within statutory limits, reviews and determines the discount rates established by the 12 Federal Reserve banks, and reviews the budgets of the reserve banks. The Federal Open Market Committee (FOMC) is responsible for the determination of Federal Reserve bank policy in the purchase and sale of securities on the open market. The federal advisory councils are purely advisory. All national banks are required to be members of the Federal Reserve System, and state banks may become members if they meet membership qualifications. The Federal Reserve System may exercise its regulatory powers by adjusting the legal reserve ratio—i.e., the proportion of its deposits that a member bank must hold in its reserve account—thus increasing or reducing the amount of new loans that the commercial banks can make. The money supply may also be influenced through manipulation of the discount (also called rediscount) rate, which is the rate of interest charged by Federal Reserve banks on short-term secured loans to member banks. A third method of regulation is through open-market operations, now employed daily to make small adjustments in the market. (Federal Reserve bank sales or purchases of securities on the open market tend to reduce or increase the size of commercial-bank reserves.)