Managers of financial institutions care so much about the activities of the federal reserve system because the Federal Reserve affects the interest rates or the inflation, and business cycles.
These all the factors have an important impact on the profitability of financial institutions such as banks.
The Federal Reserve System or we can say FRS is the central bank of the United States. Generally it is called the Fed, it is considered to be the most powerful financial institution in the world.
It was established to provide the country with a safe as well as flexible, and stable monetary and financial system.
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