Basics
What is Federal Reserve?
The US central bank that controls interest rates and the money supply
Full Explanation
The Fed is basically the bank of banks. It sets the federal funds rate, which influences everything from mortgage rates to credit cards to how stock investors behave. When the Fed raises rates, stocks often fall. When it cuts, stocks often rise.
Pro Tip
Markets obsess over every Fed statement. "Don't fight the Fed" is a famous Wall Street saying.
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