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

Last week, a federal judge issued a preliminary injunction requiring the Fed to let Cook continue serving in her role as a governor of the Federal Reserve System as her lawsuit moves through the courts. —Max Zahn, ABC News, 23 Sep. 2025

Workers clean and paint an eagle statue on the Marriner S. Eccles Federal Reserve Board Building, the main offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on September 16. —Giulia Carbonaro, MSNBC Newsweek, 18 Sep. 2025

Source: Board of Governors of the Federal Reserve System via FRED Graphic: Melinda Yao / NBC News Heading into Wednesday, markets were pricing in a high likelihood of a total of three-quarters of a percentage point in cuts by the end of the year. —Steve Kopack, NBC news, 17 Sep. 2025

This chart was created and is owned by the Board of Governors of the Federal Reserve System (US). —Wes Moss, Forbes.com, 12 Sep. 2025

Lisa DeNell Cook, nominee to be a member of the Board of Governors of the Federal Reserve System, testifies during a Senate Banking nominations hearing on June 21, 2023 in Washington, DC. —Spencer Kimball, CNBC, 26 Aug. 2025

These conferences began in 1978, the initiative of the Federal Reserve Bank of Kansas City, one of nine regional banks in the Federal Reserve System. —Arthur I. Cyr, Chicago Tribune, 26 Aug. 2025

Word History

First Known Use

1915, in the meaning defined above

Rhymes for Federal Reserve System

• cryptosystem
• ecosystem
• intersystem
• multisystem
• photosystem
• subsystem

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.)