Federal Reserve: Policy Issues in the 118th Congress

The Federal Reserve Act of 1913 (12 U.S.C. [United States Code] §§221 et seq.) created the Federal Reserve (Fed) as the nation’s central bank. The Fed’s responsibilities fall into four main categories: monetary policy, regulation of certain banks and other financial firms, provision and oversight of certain payment systems, and lender of last resort. The Fed has significant independence from Congress and the Administration to fulfill its duties, but Congress retains oversight responsibilities.

This report provides background and discusses current policy issues in each of those four areas, as well as oversight and diversity.