What is the Federal Reserve's role in managing money supply primarily centered on?

The Federal Reserve's primary role in managing the money supply is centered on conducting monetary policy. This involves controlling the amount of money circulating in the economy and influencing interest rates to achieve economic goals, such as maximizing employment, stabilizing prices, and moderating long-term interest rates. Through various tools, such as open market operations, the discount rate, and reserve requirements, the Federal Reserve can increase or decrease the money supply to respond to economic conditions.

Monetary policy is distinct from fiscal policy, which relates to government spending and taxation decisions made by legislative bodies. While consumer prices are an important aspect of the economy that may be influenced indirectly by the Federal Reserve's actions, the Fed does not directly set consumer prices. Additionally, the buying and selling of stocks fall outside the scope of the Federal Reserve's functions, as these activities are typically associated with the stock market and private investment decisions rather than the management of money supply.