The Fed (Federal Reserve) is the central bank of the United States. It was founded in 1913 under the Federal Reserve Act and is responsible for overseeing the US financial system. Because the US dollar is the world's main currency, the Fed's decisions affect investors in every country, including Thailand.
The Two Main Goals (Dual Mandate)
- Maximum employment: Keep as many people employed as the economy can support without causing inflation to surge.
- Price stability: Keep inflation at around 2% per year, as measured by the PCE index (read CPI and PCE inflation).
These two goals sometimes conflict. Raising interest rates to fight inflation may cause more job losses. Cutting interest rates to support employment may cause inflation to return.
Structure of the Fed
| Component | Details |
|---|---|
| Board of Governors | 7 members, based in Washington, D.C. Nominated by the President and confirmed by the Senate |
| Regional Federal Reserve Banks | 12 banks, such as New York, Chicago, and San Francisco |
| FOMC | The committee that decides interest rates, with 12 voting members |
| Fed Chair | Kevin Warsh, took office on May 22, 2026 |
The Fed's Tools
- Policy interest rate (Fed Funds Rate): The main tool. The Fed sets it as a "range," such as 3.75–4.00%.
- Bond purchases and sales: Buying large amounts of bonds (QE) injects money into the system. Shrinking the balance sheet (QT) drains money out.
- Communication (Forward Guidance): The wording of statements and the Fed Chair's remarks can steer market expectations even before rates are moved.
Latest Status
At the meeting on September 15–16, 2026, the Fed voted unanimously, 12–0, to raise interest rates by 0.25% to a range of 3.75–4.00%. The remaining meetings in 2026 are October 27–28 and December 8–9.
Interest rate information can change at every meeting. Follow the latest news on the news page
Why the Fed Affects Every Asset
| Fed signals rate hikes (Hawkish) | Fed signals rate cuts (Dovish) |
|---|---|
| The dollar tends to strengthen | The dollar tends to weaken |
| Gold tends to come under pressure | Gold tends to get support |
| Tech stocks and growth stocks tend to come under pressure | Stocks tend to get support |
| Crypto tends to be sold off | Crypto tends to get support |
| Capital tends to flow out of emerging markets, including Thailand | Capital tends to flow into emerging markets |
These relationships are general tendencies and do not occur every time. What matters more than the decision itself is how much the outcome differs from what the market expected.
Read more: FOMC and the Dot Plot
For education only, not investment advice. Figures change over time, so check official sources before making decisions.