TheUSFinancialMarket revised

The US Financial Market
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What are the best goals for the Fed? Why?
The FED has various goals which the US Congress put in place in 1946 Employment Act. The goals were also outlined in Balanced Growth and Full Employment Act of 1978(Flannery,Hirtle, & Kovner, 2017).These goals include:
Stabilizing the financial system-The reason for this goal is to ensure a stable financial system where potential homeowners can access mortgages, a business can easily be financed, and students can obtain loans among other responsibilities.
Fighting inflation through price stability-inflation may pose a threat to the economy. Therefore, Fed always tries to control inflation by ensuring price stability.
The full employment-The goal is crucial because it tries always to ensure best policies that accommodate conducive economic environment for job creation.
Stability in interest rate-All investors and consumers are concerned about stability in the interest rate.
Currency stability-The currency stability enables the US to import goods from other countries cheaply. Therefore, FED aims at making US currency more stable so that it can conduct business with other countries effectively.
How does the structure of the Fed insulate monetary policy decision makers from political pressure?
The Fed acts independently from political influence and pressure. Two types of independence; goal independence and instrumental independent are applied in the central bank (Williams, 2015).

It has the power to select settings for the instruments as a way of pursuing its objectives. The legislature or judiciary cannot, therefore, overturn the actions of Fed. The independence of the fed insulates it from both short-term and long-term political pressure. All decision that Federal Reserve makes are not ratified either the president or any executive member. In fact, the fed does not acquire any funding from the board of governors or Congress. More so, presidential terms are not coinciding with these terms, which facilitates to more independence. Therefore, the fed can perform it mandates and objectives independently.
How does the fractional reserve system limit a bank’s ability to create money?
The fractional reserve refers to the amount of bank deposits that the banks keep as per regulations. They cannot lead this percentage to anybody. The reserve is usually 10% of the deposits which are held as a federal requirement. This fractional reserve would have been directed to customers at an interest. They limit a bank’s ability to create money because if there were no reserves, the money would earn interest if customers borrow it. But because of fractional reserve policy, the money has to remain dormant.
What is the difference between the federal funds rate and the discount rate?
The banks usually lend money to each other in case either of them experience deficits. The funds are issued at a given rates known as the federal rate. Therefore, these funds are known as federal funds. The lending involves a short and quick procedure (overnight borrowing).The banks involved in such transactions determine their rates. The negotiations for this rate depend on a weighted average rate of the funds.
The discount rate, on the other hand, refers to the interest rate which Federal Reserve Bank charges institutions like banks. The rate is mainly higher compared to federal funds rate. The discount rate is also higher than the short-term market interest rate. More so, it is determined by the Fed. 
References
Flannery, M., Hirtle, B., & Kovner, A. (2017). Evaluating the information in the federal reserve stress tests. Journal of Financial Intermediation, 29, 1-18.
Williams, J. C. (2015). Monetary policy and the independence dilemma. FRBSF Economic Letter, 2015, 15.