Zaid

Like we freak out when the markets drop 5% in three weeks, imagine 50%.

So things got so bad in 1907 that JP Morgan, yes, the actual guy who made the bank had to step in himself.

He gathered the city's top bankers into his private library.

He locked the doors and he refused to let them leave until they agreed to pool their money together and bail out the banking system.

After that, Congress finally stepped in.

I think they realized that maybe it wasn't a great idea to rely on a handful of rich bankers to bail out the economy every time things went south.

So in 1913, Congress passed the Federal Reserve Act, which created the Federal Reserve.

The goal was to create a safer, more stable banking system.

Now here's what makes the Federal Reserve unique.

It's not a government agency, but it's also not a private bank.

It's like a weird hybrid situation.

Think of them like a quasi government institution.

You know, Congress created the Federal Reserve.

They oversee the Federal Reserve, but the Fed operates independently.

They don't,

take orders from the president or Congress when it comes to setting monetary policy.

And that independence is key, but we'll come back to that because that is at the heart of the beef between President Trump and the Fed today.

Now, the Fed's powers have evolved a lot since 1913, but for the last five decades, it's operated under what's called the dual mandate.

This was written into law in the 1970s, and it gives the Fed two main jobs.

Number one is to keep prices stable, basically keeping inflation in check.