The FEDeral Reserve System (Fed) is the highest monetary policy institution in the United States, which is responsible for keeping the reserves of commercial banks, lending to commercial banks and issuing federal reserve bonds. The Federal Reserve is organized in three layers, with the board of directors as the highest, and 12 Federal Reserve Bank and member banks of the reserve banks. The basic principles of the Federal Reserve System are "independence" and "checks and balances". As far as checks and balances are concerned, as we all know, the seven directors (including the chairman and vice-chairman) of the Bureau are nominated by the President and subject to the consent of the Senate. For monetary policy resolutions such as raising or lowering the rediscount rate, the collegial voting system is adopted, with one person and one vote, which is a "secret ballot". The chairman's one-vote vote is often voted for the political party that already has a majority of seats. Although the president can master the nomination of directors, chairman and vice chairman, once approved by the Senate, his term of office is as long as 14 years, and he can serve as president for up to 5 times. As for independence, the Fed is most praised for its personnel independence and budget independence. In addition to the board of directors, it also has the Federal Open Market Operation Committee (FOMC), which is responsible for making long-term monetary decisions and conducting foreign exchange operations according to foreign exchange guidelines, authorized operations and foreign exchange operation procedures. Due to the strong position of the US dollar in the international currency market, the intervention of the Federal Reserve in the foreign exchange market has attracted special attention. When the Japanese yen appreciates sharply due to the trade surplus, the Bank of Japan had better get the assistance and cooperation of the Federal Reserve if it wants to successfully intervene in the foreign exchange market. The Federal Reserve is also the main institution for formulating US monetary policy. Since June 1993 and 10, the economic prosperity of the United States has been rising rapidly, which may lead to inflation. Because Greenspan, then chairman of the Federal Reserve Board of Directors, ignored public opinion and political pressure and raised the discount rate seven times in a row, the American economy achieved a soft landing and got rid of the threat of inflation.