What does the Federal Reserve System control as part of its duties?

The Federal Reserve System plays a crucial role in managing the nation's monetary policy, which encompasses the control of the money supply. This control is fundamental to the overall economic stability and health of the country. By adjusting the amount of money circulating in the economy, the Federal Reserve can influence inflation rates, employment levels, and interest rates, thus impacting economic growth.

The money supply is adjusted through various monetary policy tools, including open market operations, the discount rate, and reserve requirements. For example, by buying or selling government securities, the Federal Reserve can directly affect the liquidity in the banking system, which in turn influences the availability of credit and spending levels in the economy.

This role is vital because if there is too much money in circulation, it may lead to inflation, while too little money can lead to recession. Thus, the Federal Reserve's control of the nation's money supply is central to maintaining a stable economic environment.