What is the main role of the Federal Reserve in monetary policy?

The main role of the Federal Reserve in monetary policy is to regulate the money supply and interest rates. By adjusting these factors, the Federal Reserve aims to achieve key economic objectives such as controlling inflation, maximizing employment, and stabilizing the financial system. When the Federal Reserve raises or lowers interest rates, it influences borrowing and spending behaviors throughout the economy. Additionally, through open market operations, the Fed can buy or sell government securities, which directly affects the money supply. By managing the availability and cost of money, the Federal Reserve plays a vital role in steering the economy towards desired outcomes, such as low inflation and sustainable growth.

The other options do not encompass the primary objectives of the Federal Reserve's monetary policy functions. For instance, controlling trading on the stock market and determining housing policies are not direct responsibilities, and while the Federal Reserve does influence economic conditions that can affect the housing market, it does not specifically set housing policies. Issuing government bonds is a function that falls more under the Treasury's responsibilities, whereas the Federal Reserve primarily influences the buying and selling of these bonds as part of its monetary policy toolkit.