Essay Fin 100 Pap - 716 Words

The United States financial markets impact many different venues of life. American businesses, the economy and people can feel the impact created by the financial markets. The economy and businesses can feel the impact of a financial market. A financial market, like the Stock Exchange, is a direct reflection of investor’s expectations. If investors think something terrible will happen to the market they will sale their stock. Recently the stock market has hit record breaking highs but that does not directly correlate with the actual economy. The Washington Post states there is nearly a $1 trillion dollar gap between what the U.S. economy is capable of producing and what it’s actually producing. Businesses feel that impact every day. Most business use the market as a guide that things have the potential to get better. In addition, people are directly affected in many levels by the US markets. Many people invest in different markets to increase their retirement wealth. Bonds and 401Ks can lose value by a failing financial market. If the market isn’t stable people can lose confidence which can slow growth in areas like employment.
To help regulate financial system in America the Federal Reserve was created in 1913. The Federal Reserve acts like the banker of the United States. They process Social Security and payroll checks. There responsible for the disbursement of government funded programs, like the Supplemental Nutrition Assistance Program. The Federal Reserve plays a significant role in banking regulation. They create regulations that protect consumers as they are searching for loans. A great example of a Federal Reserve regulation is the Truth in Lending Act. The Federal Reserve protects the consumer against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide loan cost information so a consumer could comparison shop for certain types of loans. The Feds or Federal Reserve also influences the economy. According to the San Francisco’s Federal Reserve website, the most important job of the Federal Reserve is to keep the economy healthy buy properly enforcing monetary policy. In return that will create and maintain a healthy employment rate, increase growth and stabilize prices.
In general, The Federal Reserve board is responsible for protecting consumers. The Reserves’ regulations protect consumers from unfair lending practices and they enforce those rules to financial institutions. The Chairman of Federal Reserve is the leader of the board. They report the board’s activities and monetary policies twice a year to Congress. The chairman also serves as a member of the international financial board. Ben Bernanke is the current Chairman of the Federal Reserve.
The Federal Board also influences the national interest rate. If we take a look at today’s interest rate, which is roughly 3.2% for a thirty year fixed mortgage, the rate is

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