At the interest rate the Fed pays on banks' reserve balances, interest rate does the demand curve for reserves become perfectly elastic.
The central banking system of the United States of America is the Federal Reserve System, usually referred to as the Federal Reserve or just the Fed.
With the passage of the Federal Reserve Act on December 23, 1913, it was established in response to the need for centralized control of the monetary system to prevent financial crises following a string of financial panics, including the Panic of 1907.
The Federal Reserve System's functions and responsibilities have grown over time as a result of occasions like the Great Depression in the 1930s and the Great Recession in the 2000s.
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