In the United States, the Federal Reserve, known as the Fed, is the policy-making body that regulates the money supply. Its economists track the money supply over time in order to determine whether too much money is flowing, which can lead to inflation, or too little money is flowing, which can cause deflation. The Fed has a couple of weapons to use in order to keep the economy growing at a reasonable level:

* It controls interest rates by setting the key rates that it charges to the nation's banks for the overnight loans of government money that keep the banking system running. The rates for all other loans are derived from those federal lending rates.

* It adds or removes cash from the system by changing the amount of money that flows to banks for use in loans to businesses and consumers.