The Federal Reserve, explained
The Federal Reserve sets the price of money in the United States. Its decisions on interest rates, quantitative easing and its balance sheet ripple through mortgages, markets, the dollar — and the price of gold.
These videos cover how the Fed works, what the federal funds rate actually controls, and how quantitative easing expanded the Fed's balance sheet from under $1 trillion to several trillion dollars.
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Common questions
What does the Federal Reserve actually do?
The Fed sets short-term interest rates, buys and sells securities to influence longer-term rates and bank reserves, supervises banks, and acts as lender of last resort during crises. Its dual mandate is price stability and maximum employment.
What is quantitative easing?
Quantitative easing (QE) is when a central bank creates new reserves to buy government bonds and other securities, expanding its balance sheet. It lowers long-term interest rates and increases the money supply — a policy used heavily after 2008 and 2020.
How do Fed rate hikes affect gold?
Rising real interest rates typically pressure gold in the short term because yield-bearing assets become more competitive. But gold has historically performed well when rates rise because of inflation — the reason matters more than the move itself.
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Questions about Fed policy and your savings?
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