There are several misconceptions about the Fed. Do we print money? Do we own gold? Read on as we set the record straight.
Myth: The Fed prints money
You might know that on average, the Federal Reserve Banks process 33 billion banknotes a year. However, the Fed does not print money. Each year, the Federal Reserve places a print order with the Bureau of Engraving and Printing (Off-site) to produce new banknotes. Nearly 90% of the new notes replace notes that have been removed from circulation due to being unfit or having an old design. Watch the U.S. Currency Education Program’s video How does U.S. currency get into circulation? (Off-site) to learn more.
Myth: The Fed owns gold
The Federal Reserve does not own any gold; however, the Federal Reserve Bank of New York acts as the custodian of gold owned by account holders such as the U.S. government, foreign governments, other central banks and official international organizations. No individuals or private-sector entities are permitted to store gold in the vault of the Federal Reserve Bank of New York or at any Federal Reserve Bank.
Myth: Individuals can open accounts with the Fed
The Federal Reserve Banks provide financial services to financial institutions and governmental entities only. Individuals cannot, by law, have accounts at the Federal Reserve.
Myth: Fed employees are considered federal government employees
Federal Reserve Bank employees are not government employees; however, Board of Governors employees are considered government employees. To learn more about how Fed employees’ jobs have changed over the years, check out our last Fed Facts article, “Fed Facts: The changing workforce of the Federal Reserve Banks.”