Central bank

A central bank is the institution responsible for managing a country's or region's monetary policy, primarily by setting interest rates and controlling the money supply, with the general goals of controlling inflation and supporting stable economic growth. The Federal Reserve is the central bank of the United States.

Central bank decisions on interest rates ripple through the whole economy and markets, affecting everything from mortgage rates to how attractively bonds are priced relative to stocks, which is why investors pay close attention to central bank meetings and statements.