Final answer:
The real power within the Federal Reserve System largely resides with the Board of Governors, who are appointed for staggered 14-year terms and make key monetary policy decisions independently of Congress.
Step-by-step explanation:
The real power within the Federal Reserve System lies predominantly with the Board of Governors. This board consists of seven members including the Chair, all appointed by the President of the United States and confirmed by the Senate. These governors serve staggered 14-year terms, which aids in insulating them from political pressure, ensuring that decisions are made based on economic merits rather than politics. The Federal Reserve also includes 12 regional Federal Reserve Banks, each with its own role in the system. However, it is the Board of Governors, with its long terms and independence from direct political control, that actually wields significant power within the Federal Reserve System. Their decisions on monetary policy, which include setting interest rates and regulating the money supply, do not require congressional approval, granting them considerable control over the nation's economy.