The Rundown Deep Dive: A Brief History of the Federal Reserve (And the Threat It Faces Today)
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Jan 17, 2026 Explore the fascinating history of the Federal Reserve and its crucial role through significant crises like the Great Depression and the 2008 financial meltdown. Discover how political pressures, particularly from President Trump, challenge the Fed's independence. Delve into the complexities of interest rates and their impact on the economy, as well as the Fed's rapid responses during the COVID-19 pandemic and the rise in inflation. The discussion reveals how the future of the Fed could shape America's economic landscape.
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Why The Fed Was Created
- The pre-Fed U.S. banking system suffered frequent regional bank runs that repeatedly crashed local economies.
- Congress created the Federal Reserve in 1913 to build a safer, more stable banking system and reduce reliance on private bailouts.
1907 Panic And J.P. Morgan's Intervention
- The Panic of 1907 caused multiple New York banks to collapse and the stock market fell 50% in weeks.
- J.P. Morgan personally corralled bankers to pool funds and bail out the system, prompting Congress to act.
The Fed's Dual Mandate And Tool
- Since the 1970s the Fed operates under a dual mandate: price stability and maximum employment.
- The Fed primarily uses interest rate changes to cool or heat the economy and influence inflation and jobs.