---
title: MCP Protocol
description: Understanding the Model Context Protocol
icon: 'plug'
---
# Model Context Protocol (MCP)
The Model Context Protocol is an open standard that enables AI assistants to securely connect to external data sources and tools.
## Protocol Overview
MCP provides a standardized way for AI assistants to:
<CardGroup cols={2}>
<Card title="Access Tools" icon="wrench">
Execute functions and retrieve data from external systems
</Card>
<Card title="Exchange Data" icon="arrow-right-arrow-left">
Send structured requests and receive formatted responses
</Card>
<Card title="Maintain Context" icon="brain">
Preserve conversation state and execution history
</Card>
<Card title="Ensure Security" icon="shield">
Control access and validate requests
</Card>
</CardGroup>
## Architecture
### Communication Flow
```mermaid
sequenceDiagram
participant User
participant Client as MCP Client
participant Server as MCP Server
participant API as External API
User->>Client: Request data
Client->>Server: MCP tool request
Server->>API: API call
API->>Server: API response
Server->>Client: MCP formatted response
Client->>User: Present results
```
### Components
#### MCP Client
The client runs within the AI assistant environment:
- Handles user interactions
- Formats tool requests according to MCP spec
- Parses server responses
- Manages connection lifecycle
#### MCP Server
The server bridges AI assistants and external services:
- Exposes available tools and capabilities
- Validates incoming requests
- Transforms requests to API calls
- Formats responses for AI consumption
- Handles errors and retries
## Protocol Features
### Tool Discovery
Servers advertise their capabilities:
```json
{
"tools": [
{
"name": "fred_search",
"description": "Search FRED economic data series",
"inputSchema": {
"type": "object",
"properties": {
"query": {
"type": "string",
"description": "Search terms"
}
},
"required": ["query"]
}
}
]
}
```
### Request Format
Tool calls follow a standardized structure:
```json
{
"method": "tools/call",
"params": {
"name": "fred_search",
"arguments": {
"query": "unemployment rate",
"limit": 10
}
}
}
```
### Response Format
Servers return structured data:
```json
{
"content": [
{
"type": "text",
"text": "Found 10 series matching query"
},
{
"type": "resource",
"resource": {
"uri": "fred://series/UNRATE",
"name": "Unemployment Rate",
"mimeType": "application/json"
}
}
]
}
```
## Connection Types
### Standard I/O (stdio)
Direct process communication:
- Server runs as subprocess
- Uses stdin/stdout for messaging
- Lowest latency
- Most secure (no network exposure)
**Configuration:**
```json
{
"mcpServers": {
"fred": {
"command": "npx",
"args": ["-y", "fred-mcp-server"],
"env": {
"FRED_API_KEY": "your-api-key"
}
}
}
}
```
### HTTP/SSE
Network-based communication:
- Server runs as web service
- Uses Server-Sent Events for streaming
- Supports remote deployment
- Requires network configuration
## Security Model
### Authentication
<AccordionGroup>
<Accordion title="API Key Management">
- Keys stored in environment variables
- Never exposed in requests/responses
- Can be rotated without code changes
</Accordion>
<Accordion title="Request Validation">
- Schema validation on all inputs
- Type checking and sanitization
- Rate limiting enforcement
</Accordion>
<Accordion title="Sandboxing">
- Server runs in isolated process
- Limited filesystem access
- Network access controlled
</Accordion>
</AccordionGroup>
### Data Privacy
MCP ensures:
- No data logged without consent
- Responses contain only requested data
- Secure transmission between components
- API keys never appear in responses
## Error Handling
### Error Types
| Code | Type | Description |
|------|------|-------------|
| -32700 | Parse Error | Invalid JSON received |
| -32600 | Invalid Request | Malformed request structure |
| -32601 | Method Not Found | Unknown tool requested |
| -32602 | Invalid Params | Bad parameter values |
| -32603 | Internal Error | Server-side failure |
### Error Response Format
```json
{
"error": {
"code": -32602,
"message": "Invalid params",
"data": {
"field": "query",
"reason": "Required parameter missing"
}
}
}
```
## Performance Considerations
### Request Optimization
<Steps>
<Step title="Batch Related Calls">
Group similar requests when possible
</Step>
<Step title="Use Streaming">
For large datasets, stream results incrementally
</Step>
<Step title="Limit Data Requests">
Request only necessary date ranges and series
</Step>
<Step title="Implement Timeouts">
Set reasonable limits for long-running operations
</Step>
</Steps>
### Connection Management
- Reuse server processes
- Implement connection pooling
- Handle graceful shutdowns
- Monitor resource usage
## MCP Specification
The protocol follows JSON-RPC 2.0 with extensions:
### Core Methods
| Method | Purpose |
|--------|---------|
| `initialize` | Establish connection |
| `tools/list` | Discover available tools |
| `tools/call` | Execute tool |
| `resources/list` | List available resources |
| `resources/read` | Access resource content |
| `prompts/list` | Get prompt templates |
### Lifecycle
```mermaid
stateDiagram-v2
[*] --> Initializing
Initializing --> Ready: initialize success
Ready --> ToolCall: tools/call
ToolCall --> Ready: response
Ready --> [*]: shutdown
```
## Best Practices
### Server Development
<Tip>
**Key principles:**
- Implement comprehensive error handling
- Validate all inputs thoroughly
- Provide clear, descriptive tool schemas
- Return actionable error messages
- Log appropriately for debugging
</Tip>
### Client Integration
<Warning>
**Common pitfalls:**
- Not handling connection failures
- Ignoring timeout scenarios
- Poor error message presentation
- Inadequate retry logic
</Warning>
## FRED MCP Implementation
This server implements MCP to provide:
### Tools
1. **fred_search**: Full-text search across all series
2. **fred_browse**: Navigate category hierarchy
3. **fred_get_series**: Retrieve time series data
### Resources
- Series metadata
- Category information
- Release schedules
### Prompts
- Economic analysis templates
- Data exploration guides
- Research question frameworks
## Next Steps
<CardGroup cols={2}>
<Card
title="API Tools"
icon="wrench"
href="/api-reference/overview"
>
Explore available tools
</Card>
<Card
title="FRED Data"
icon="database"
href="/core-concepts/fred-data"
>
Understand data structure
</Card>
<Card
title="Authentication"
icon="key"
href="/core-concepts/authentication"
>
Setup API access
</Card>
<Card
title="Examples"
icon="code"
href="/examples/basic-usage"
>
See usage examples
</Card>
</CardGroup>
