Monetary policy refers to the actions taken by central banks, such as the Federal Reserve in the United States, to influence the money supply and interest rates in order to promote economic growth and stability. This includes setting monetary targets like inflation or employment levels, using tools such as adjusting short-term interest rates, buying government bonds, or implementing quantitative easing programs. The goal of monetary policy is to ensure price stability, support full employment, and promote economic growth while keeping inflation in check.