Most of us know the heads of these organizations: Ben Bernanke as the Chairman of the Federal support (Alan Greenspan being his predecessor) and Timothy Geithner as the Secretary of the Treasury (Henry "Hank" Paulson being his predecessor). But it's not always positive how each of them is functioning.
What's the contrast in the middle of The Federal reserve and The Us Treasury Department?
The Us Treasury department can be idea of as the book keepers for the United States as an entity. If you think of the United States as if it were a company, it's a company that gets revenue (mostly in the form of taxes) and has expenses (which can be forces expenses, entitlement programs, etc.). They derive revenues straight through the Irs (Internal revenue Service) and effectively "pays the bills" of the United States. If the Us has more expenses than it does revenue, it puts us at a deficit. In order to raise the money to pay for this deficit, the Us Treasury will use Us government debt instruments (such as bonds, notes and bills). In increasing to this, the Treasury prints and mints all paper currency and coins in circulation straight through the Bureau of Engraving and Printing and the Us Mint (which has operating facilities in Philadelphia, San Francisco, Denver and West Point). This is why you will regularly see Timothy Geithner testifying before Congress when it has to do with deficits, the debt ceiling, or taxes (think "revenue"). This is also why we saw his predecessor Hank Paulson complex in the government bailouts (as it was going to involve a government expense).
The Federal support is a newer entity that was created in 1913 after a series of financial panics (particularly the severe one in 1907). The general purpose of the Federal support is to stabilize prices, maximize employment and moderate long-term interest rates. A key way that they do this is by lowering and increasing the "Fed Funds Rate" (which is the rate that a great deal of lending is based on). If the cheaper is sluggish, they will lower the rate to make it cheaper for borrowers to get money. This flood of money into the store acts as an economic stimulus and (hopefully) keeps prices stable. Also this stronger question for goods should keep employment numbers under control. Conversely, if the cheaper heats up and there is too much money chasing too few goods then it can cause prices to go up (inflation) and the Fed may growth interest rates to choke out the money supply. They have further tools to operate money contribute such as setting the number of money banks must have on support and controlling other interest rates such as the "Discount Rate".
In terms of controlling monetary policy, the Federal support is in currently in uncharted territory. They have pushed rates down as low as they are able and have been doing new tactics meant to stimulate the cheaper such as Quantitative Easing (called Qe1 and Qe2). These are programs that have been over-simplistically called "the Fed printing money" or more appropriately called the "Fed increasing its balance sheet". This is where the Fed buys back discrete bonds in order to take off toxic assets off balance sheets (such as during the Savings and Loan Crisis) or to buy mortgage-backed bonds to drive lending costs down. To do this, the Fed electronically creates money (they are not unmistakably printing money). Because of these responsibilities, this is why you'll regularly see Ben Bernanke testifying before Congress when it comes to economics and stimulating the economy.
Reserve
Reserve
Reserve
There are further nuances of these institutions, but at a minimum it should serve to distinguish the two from one another.
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