What The Federal Reserve Really Is

by James Rickards
Daily Reckoning

Investors and analysts throw around the term “Fed” without much reflection on what the Federal Reserve actually is and is not.

It’s important to understand the Fed’s structure as a prelude to understanding its policy process. Knowing how the central bank is organized and who’s in charge can position you to preserve wealth and even profit from the coming Fed-induced turmoil.

The Federal Reserve is not a single central bank, but a system of twelve regional reserve banks under the supervision of a board of governors in Washington DC. This central body is called The Board of Governors of the Federal Reserve System. It has a chairperson, currently Janet Yellen, and a vice chairperson, currently Stanley Fischer.

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