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As you head out for the weekend, you may be worried. You've heard that there's some sort of kerfuffle in Washington over the next Chair of the Federal Reserve, but you haven't been paying attention. What if it comes up while you're sipping a gin and tonic at a backyard get-together on Sunday? Worry not, attendees of unusually urbane barbecues. We've got you covered. Here's everything you might possibly need to know about the three-person contest to run the Fed.
We shall start, as is tradition, at the beginning.
What is the Fed chair?
The Federal Reserve ("Fed," for short) is the central bank of the United States.
Which prompts the question: What is a central bank? A central bank is an institution that, in short, manages a country's currency and interest rates. Established partly in response to a series of economic panics in the 19th century, the Fed allows the country to adjust the money supply to regulate against inflation — and other things, as described here. The Fed also operates banks that manage twelve districts around the country.
In short: The Fed acts as a watchdog over the economy and the financial institutions that constitute it. It is managed by a board of governors, lead by the chairperson of that board. Or, really, the chairman; there has never been a woman in that position. The current chairperson is Ben Bernanke. Before him, it was Alan Greenspan. That you probably know both of those names indicates the importance of the position.