What is the main role of the Federal Reserve System?

The main role of the Federal Reserve System is to regulate the banking industry and manage inflation. The Federal Reserve, often referred to as the Fed, serves as the central bank of the United States and has several key responsibilities that are essential for maintaining economic stability. One of its primary functions is to implement monetary policy, which involves managing the money supply and interest rates to influence economic activity. By raising or lowering interest rates, the Fed can encourage or discourage borrowing and spending, directly affecting inflation levels.

In terms of banking regulation, the Federal Reserve supervises and regulates banks to ensure the stability and safety of the financial system. This oversight helps prevent bank failures and maintains confidence in the banking sector, which is crucial for a well-functioning economy.

The other options do not accurately reflect the primary responsibilities of the Federal Reserve. Controlling wages and salaries is not within the Fed's purview; it does not settle disputes between businesses, nor does it oversee the stock market directly. While the Fed's policies can impact the financial markets, its main focus is on monetary policy, banking regulation, and controlling inflation, making the correct choice distinctly aligned with its core functions.