The United States dollar (symbol: $; code: USD) is the official currency of the United States and several other countries. It is divided into 100 smaller units called cents (symbol: ¢).

The U.S. dollar is the world's primary reserve currency, held by many central banks and commercial institutions worldwide. It is also the most widely used currency in international transactions and is the dominant currency for global commodity pricing, including oil and gold.

As of 2024, approximately $2.33 trillion in U.S. currency is in circulation, roughly 45% of which is held outside the United States.

The Federal Reserve System, established in 1913, serves as the central bank of the United States. It conducts monetary policy through three primary tools: open market operations, the discount rate, and reserve requirements.

The Fed’s dual mandate is to promote maximum employment and price stability (targeting ~2% annual inflation). During the 2008 financial crisis, the Fed introduced quantitative easing (QE), purchasing trillions in government bonds and mortgage-backed securities.

The Federal Funds Rate, the interest rate at which banks lend to each other overnight, is the Fed’s primary mechanism for influencing economic activity.

Inflation measures the rate at which the general price level of goods and services rises, eroding purchasing power. The U.S. Bureau of Labor Statistics tracks inflation via the Consumer Price Index (CPI).

Since 1913, the dollar has lost approximately 96% of its purchasing power. What cost $1 in 1913 would cost roughly $31 today. The Fed targets a 2% annual inflation rate as consistent with price stability.

Notable inflation periods include the 1970s stagflation (peaking at 14.8% in 1980) and the 2021–2023 post-pandemic surge (peaking at 9.1% in June 2022).

The United States has the world’s largest economy by nominal GDP at over $27 trillion (2024). The dollar’s stability and the depth of U.S. capital markets attract global investment.

The New York Stock Exchange (NYSE) and NASDAQ are the world’s two largest stock exchanges by market capitalization. The U.S. Treasury bond market is considered the global benchmark for risk-free assets.

Recent innovations include digital payment systems, exploration of a potential digital dollar (CBDC), and the integration of blockchain technology into traditional financial infrastructure.

The U.S. financial system is regulated by multiple agencies: the SEC (securities), CFTC (commodities), OCC (national banks), FDIC (deposit insurance), and the Federal Reserve (monetary policy & bank supervision).

The Government Accountability Office (GAO) audits the Federal Reserve annually. However, the Fed’s monetary policy decisions and transactions with foreign central banks are exempt from GAO audit, a point of ongoing political debate.

Anti-money laundering (AML) and Know Your Customer (KYC) regulations are enforced by FinCEN under the Bank Secrecy Act.