The Federal Reserve System is the central banking system of the United States, established in 1913. Its primary purpose is to manage the country's monetary policy, regulate banks, and provide financial services. The system consists of twelve regional banks and a Board of Governors, which work together to ensure economic stability and growth. One of the key functions of the Federal Reserve is to control inflation and influence interest rates through tools like open market operations and the discount rate. By adjusting these rates, the Federal Reserve aims to promote maximum employment and stable prices, contributing to the overall health of the U.S. economy.