Open Market Operations
How the Federal Reserve utilize the tool of open market operations (OMO) to control the supply of money in the banking systems
The open market operation is a powerful operation tool used by the Federal Reserve that’s not as well-known as the discount rate or fed funds rate. Open market operations are when the Fed buys securities from banks when it wants the rate to fall and sells them when it wants rates to rise. The discount rate typically affects all other interest rates, including the interest rate banks charge each other for one-month, three-month, six-month, and one-year loans. It is also known as LIBOR, which affects credit card rates, adjustable-rate and mortgage rates. The rate banks charge their best customers is called the prime rate, which affects the savings account and money market interest rates. The discount rate only indirectly influences Fixed-rate mortgages and loans. They are affected mainly by the yields on longer-term Treasury notes.
The Federal reserves employ open market operations as their primary tool to influence the supply of bank reserves. The monetary tool of open market operations consists of Federal Reserve purchases and sales of financial instruments, usually securities issued by the treasury, Federal agencies and government-sponsored enterprises. When the Fed wants to increase reserves, it buys securities and pays for them by depositing to the account maintained at the Fed by the primary dealer’s bank. When the Fed wants to reduce reserves, it sells securities and collects from those accounts. Considering that the Federal Reserve control of reserves is not permanent, it usually engages in transactions reversed within several days. Moreover, the Federal Reserve controls the number of bank reserves by trading securities that affect the federal funds rate or the overnight lending rate at which banks borrow from each other.
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason may is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Our essay writers are graduates with diplomas, bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college diploma. When assigning your order, we match the paper subject with the area of specialization of the writer.
- Plagiarism free papers
- Timely delivery
- Any deadline
- Skilled, Experienced Native English Writers
- Subject-relevant academic writer
- Adherence to paper instructions
- Ability to tackle bulk assignments
- Reasonable prices
- 24/7 Customer Support
- Get superb grades consistently
1. Place an order
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
2. Pay for the order
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
3. Track the progress
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
4. Download the paper
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH BROOK WRITERS TODAY AND GET AN AMAZING DISCOUNT