What is the primary role of the Federal Reserve in the economy?

The primary role of the Federal Reserve, often referred to as the Fed, is to oversee monetary policy and ensure financial stability within the economy. This entails managing the money supply and interest rates to achieve macroeconomic goals such as maximum employment, stable prices, and moderate long-term interest rates. By adjusting the federal funds rate and utilizing various monetary policy tools, the Federal Reserve can influence economic activity, control inflation, and stabilize the banking system.

In addition to managing monetary policy, the Fed also plays a critical role in supervising and regulating banking institutions to ensure the safety and soundness of the financial system, which contributes to overall economic stability. This dual focus on monetary policy and financial oversight illustrates the Fed's vital function in maintaining the health of the economy.

The other options present roles that, while significant in their own right, do not align with the primary functions of the Federal Reserve. The management of the stock market, supervision of commercial real estate transactions, and regulation of international trade are typically outside the scope of the Fed’s responsibilities. Instead, these areas are overseen by various other government bodies and regulatory agencies.