Which institution is responsible for monetary policy in the United States?

The institution responsible for monetary policy in the United States is the Federal Reserve, often referred to as the Fed. The Federal Reserve is the central bank of the nation and plays a crucial role in regulating the money supply and interest rates. By adjusting these elements, the Federal Reserve seeks to achieve macroeconomic objectives such as maximum employment, stable prices, and moderate long-term interest rates.

The Federal Reserve operates independently from the government to help minimize political influence on monetary policy decisions. It employs various tools, including open market operations, the discount rate, and reserve requirements, to control the supply of money and credit in the economy. This allows the Fed to influence inflation and stabilize economic fluctuations, making it a key player in maintaining the overall economic health of the country.