What is the role of the US Federal Reserve and what tools they use to implement their policies?

Answer 1

The US federal reserve provides banking services to the federal government of the United States. It also gives financial services to depository institutions in the country.

Answer 2

The US Federal Reserve's role is to conduct monetary policy to promote price stability, maximum employment, and moderate long-term interest rates. To implement their policies, the Federal Reserve uses various tools. These include open market operations (buying and selling government securities), changing the reserve requirement (the amount of reserves banks must hold), and adjusting the discount rate (interest rate at which banks can borrow from the Federal Reserve). Additionally, they communicate their intentions and outlook through statements and speeches.