The Fed get it's powers from the Federal Reserve Act of 1913 that spells out the policy and operation of the Fed. The President appoints the Governors of the Fed and it operates mostly independently with powers given to it by the Congress. The over sight of the Federal Reserve lies with the Congress. The Fed operates, essentially, as a ''fourth" branch of the Government that is suppose to be immune from political interference. The politicians, for the most part, follow this "arms length" policy when it comes to the Federal Reserve.