Zaid

Welcome back to The Rundown for another weekend deep dive.

Today, we are talking about the Federal Reserve.

The Fed plays a crucial role in the U.S.

economy.

Their job is to keep inflation low and employment high.

But now the Fed is facing a crisis that could have wide ranging impacts.

So in today's episode, we'll break down what the Federal Reserve actually is, why it was created, how it shaped some of the biggest moments in American history, and why the current beef between President Trump and Fed Chair Jerome Powell might be the biggest threat to the Fed's independence in decades.

We got a great one for you today.

Let's dive in.

To understand why the Federal Reserve is so important, you have to first look at how things were like before they existed.

The American banking system before the Fed was a total mess.

See, throughout the 1800s, a financial crisis was like a seasonal event.

years, people would lose confidence in their banks.

Then everyone would rush to the bank to withdraw their money at the same time.

The bank would then collapse because remember, banks don't keep all their deposits in cash in the vaults.

So these bank runs would destroy livelihoods and take down the economy.

And this was happening regionally every few years.

The breaking point was the Panic of 1907.

This bank run was so bad that multiple banks in New York collapsed and the stock market fell 50% in three weeks.

I mean, imagine that happening today.