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Conducting Open Market Operations Conversely, if the Fed wants to decrease the money supply, it sells bonds from its account. Doing so takes in cash and removes money from the banking system. Adjusting the federal funds rate is often a heavily anticipated economic event.

The Federal Reserve is America's central bank. Its job is to manage the U.S. money supply, and for this reason, many people say the Fed "prints money." But the Fed doesn't have a printing press that cranks out currency. Only the U.S. Department of Treasury can do that.

Federal Reserve Banks order new currency from the U.S. Mint and remove it from circulation as needed.

Federal Reserve Bank cash offices distribute banknotes to the public through depository institutions, such as commercial banks, credit unions, and savings and loans associations. Federal Reserve Banks are responsible for processing banknotes to ensure that they are genuine and fit for recirculation.

The Federal Reserve System operates 28 cash processing locations in the United States, providing U.S. currency and coin to financial institutions domestically and around the world. Banks in the United States order currency and coin from the Federal Reserve (Fed) and deposit excess banknotes back with the Fed.

The Federal Reserve, as America's central bank, is responsible for controlling the supply of U.S. dollars. The Fed creates money by purchasing securities on the open market and adding the corresponding funds to the bank reserves of commercial banks.

To replace destroyed notes and to accommodate the growing demand for U.S. currency domestically and abroad, the Federal Reserve Banks issue newly printed currency each year. The U.S. Bureau of Engraving and Printing (BEP) (Off-site) prints new currency in its Washington, D.C. and Ft.