Central bank policies refer to the strategies and actions taken by a country's central bank, such as the Federal Reserve in the United States, to manage the economy. These policies aim to control inflation, stabilize the currency, and promote economic growth. Central banks use tools like interest rates and reserve requirements to influence the money supply and overall economic activity. One key aspect of central bank policies is monetary policy, which involves adjusting interest rates to either encourage borrowing and spending or to cool down an overheating economy. Additionally, central banks may engage in quantitative easing, a process of purchasing financial assets to inject liquidity into the economy and support financial markets.