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The Federal Reserve System is the central bank of the United States. It was created based on the Federal Reserve Act of December 23, 1913.The Fed system makes it the single most powerful player in the US economy and the world. The Fed buys US Treasury bonds from the federal government. That’s because the Fed has created funds to buy US Treasury bonds.

The Fed is called “Banker Bank”. This is because each reserve bank store money, processes checks, and most importantly, provides loans to its members to prepare its reserves when needed.