Which entity primarily uses monetary policy to influence the economy?

Monetary policy is primarily the domain of the central bank of a country, which in the United States is the Federal Reserve. The Federal Reserve has the responsibility of managing the money supply and interest rates to promote economic stability and growth. By adjusting these factors through various tools, such as open market operations, the discount rate, and reserve requirements, the Federal Reserve can influence inflation, employment, and overall economic activity. This role is crucial because it allows the Fed to respond to changes in the economy and implement measures that can help mitigate recessions or control inflation.

In contrast, the Federal Treasury focuses on managing government revenue and expenditures, which involves fiscal policy rather than monetary policy. The Internal Revenue Service is primarily concerned with tax collection and enforcement, and the Department of Commerce oversees economic statistics and trade policies but does not directly influence monetary movements. Therefore, the Federal Reserve's role as the architect of monetary policy is key in shaping the economic landscape of the nation.