To many Americans, the Fed is a big black box, and its decisions remain largely inscrutable.

The Federal Reserve – one of the world’s most powerful institutions – affects the U.S. economy in a way that no other part of government can.

Interest rates, inflation and bank regulation are all shaped by Fed policy and impact the everyday financial life of Americans, whether they realize it or not. Its decisions can influence everything from the cost of a mortgage to business hiring and the pace of economic growth.

Originally published on theconversation.com, part of the BLOX Digital Content Exchange.

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