Open market operations involve the buying and selling of government securities by the Federal Reserve to control the money supply and influence interest rates. It is a primary tool used by the Federal Reserve to achieve its monetary policy objectives.
congrats on reading the definition of Open market operations. now let's actually learn it.
The process by which a central bank (like the Federal Reserve) manages a country’s money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.
The cost of borrowing money typically expressed as an annual percentage of the loan amount; controlled by central banks to influence economic activity.
Government Securities: Financial instruments issued by the government to finance its fiscal deficits and are bought and sold during open market operations