In simplest terms, the Fed is the central bank responsible
for the stability of our money, the US dollar.
History has shown that the creation of money cannot
be trusted to politicians -- perhaps the first modern
example is the 1720 collapse of John Law's bank
established by royal edict in France
("The Mississippi Scheme," described in
"Extraordinary Popular Delusions and the Madness of Crowds,"
by Charles Mackay.) An independent central bank is
necessary, but not easy.
The Fed publishes an online book about its purpose and function