Federal Reserve Open Market Operations
SUMMARY
The Federal Reserve's operating strategy for implementing monetary policy involves interest rate targeting through open market operations. The Federal Reserve does not utilize reserve requirements or the discount rate as part of this strategy. Open market operations involves the buying and selling of securities in the open market, in order to influence reserve balances. By manipulating reserve balances, the Federal Reserve can control the price of reserves in the market. The price of reserves is known as the Federal Funds rate. The Federal Funds rate is the interest rate banks charge each other for lending and/or borrowing reserve balances. This paper will discuss how the Federal Reserve implements a strategy of interest rate targeting through open market operations.
Part I Introduction
The Federal Reserve Bank is the central bank of the United States. In 1913, Congress created the Federal Reserve System to provide stability to the financial and monetary system. The Federal Reserve Bank (from here on, referred to as the "FED") has four main functions. They conduct monetary policy by influencing money supply in the economy, in order to maintain full employment, price stability, and promote economic growth. They regulate and supervise banking institutions to ensure the safety and soundness of the U.S. financial and banking system. The FED also provides financial and banking services to the U.S. Government, the public, and to financial institutions. And lastly, the FED maintains stability in the financial system by reducing systemic risks that may arise in the markets.
The Federal Reserve System is made up of the Board of Governors and twelve regional Federal Reserve banks. The Board of Governors consists of seven members who are appointed by the President of The United States, and must be confirmed by the Senate. All seven governors are members of the Federal Open Market Committee (FOMC), and each vote on the conduct of open market operations. The network of twelve regional banks performs various functions, including; operating a nationwide payments system, distribution of currency and coin, supervising and regulating member banks, and serving as banker for the United States Treasury.
The Federal Open Market Committee (FOMC) is a major part of the Federal Reserve...
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... Trends - The Funds Rate Target and Interest Rates - September 1999. http://www.stls.frb.org/docs/publications/mt/1999/cover9.pdf - 12-13-99
· The Dwindling Power of Rate Cuts.
http://www.nytimes.com/2001/10/03/opinion/03wed1.html
October 3, 2001.
· Another Rate Cut From the Fed.
http://www.nytimes.com/2001/12/12/opinion/12wed2.html
December 12, 2001.
· Hess, Diane. 2001. Fed Paints Real Rates a Deeper Shade of Red.
http://www.thestreet.com/markets/taleofthetape/10005186.html
December 11, 2001.
· Task, Aaron L., 2001. Cutting Spree May Dull Fed's Blade.
http://www.thestreet.com/markets/aarontaskfree/10003583.html
November 06, 2001.
Speeches:
· Meyer, Laurence H., 2001. Remarks by Governor Laurence H. Meyer. Before the National Association of Business Economics. The Federal Reserve Board. November 27, 2001.
· Greenspan, Alan. 2001. Testimony of Chairman Alan Greenspan. Before the Joint Economic Committee, U.S. Congress. The Federal Reserve Board. October 17, 2001.
· Greenspan, Alan; 2001. Testimony of Chairman Alan Greenspan. Before the
Committee on Financial Services, U.S. House of Representatives. The Federal Reserve Board. July 18, 2001.
Hypertension can occur in anyone but according to the National Heart, Lung, and Blood Institute (NHLBI, 2012). Blood pressure does tend to increase as you age, thus older aged individuals tend to be the highest population that has hypertension (NHLBI, 2012). In...
In this paper I will explain which of the monetary tools available to the Federal Reserve are most often used and the reasons for that. I will also describe how expansionary activated conducted by the Federal Reserve impact credit avilaiblilty, the money supply, interest rates and security prices, and to conclude I will show the result of the transactions in the form of a balance sheet supposing the Federal Reserve
In the 2011 article ‘The True Meaning of Separation of Church and State’ by Bill Flax, “Faith is no civil contract, but a personal matter not to be profaned by politics.” These are the exact intentions of the US Constitution and the federal government. The goal is to allow citizens religious freedom that is uninhibited by federal regulation. This essay describes the fundamental reasons why faith groups and institutions should not be allowed to form political parties. This will be done by defining what religion is and how it applies to moral living. Second, this essay will cover the US Constitution and why it also defines moral living. Finally it will define why religion and government in the United States do not belong together. This essay is designed to only examine the US government.
At the end of the first chapter, Fitzgerald uses symbolism to portray Gatsby’s nostalgia, by introducing us to the “mysterious green light at the end of the dock” to which Gatsby stares at. The Green light, due to it’s color, symbolizes Gatsby’s Hopes and dreams which is is the completion of his materialistic wealth through his marriage of Daisy. The green color represents wealth, which is his love for Daisy, in which the color reveals to us that Gatsby’s wealth would be complete, when he finally gets Daisy to marry him. As stated above, the green light is the first symbolic depiction of Gatsby’s nostalgia, which is his love for Daisy and his dream of marrying her to complete his wealth.
Metzler, Allan H. A History of the Federal Reserve, Vol I and II. University Press Books, 2002
Lopatto, Paul. Religion and the Presidential Election. Edited by Gerald M. Pomper. New York: Praeger, 2014.
Thesis Statement: I want to show Iran’s dramatic change of regimes and the way its people were treated starting with Pahlavi’s authoritarian rule. I also want to discuss the turbulant realtionship bewteen Iran and the United States, and how this all makes the Iran Hostage Crisis.
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For Most Americans, the story starts with the Iranian hostage crisis, but they do not always think about what led up to this point.. The events that lead up, which included the United Sates overthrowing Iran democracy and installing a pro United States dictator, made it almost impossible that the Iranians would not fight back with extreme measures. The Iranian Hostage Crisis was a diplomatic crisis between Iran and the United States Fifty-two Americans were held hostage for 444 days (November 4, 1979, to January 20, 1981), after a group of Iranian students supporting the Iranian took over the US Embassy in Tehran. President Carter called the hostages "victims of terrorism and anarchy," adding that "the United States will not yield to blackmail”. The Iranian Hostage Crisis was inevitable because western nations imposed their modern ideas on Iran. Along with imposing a pro United States dictator, the West also controlled their oil, which was their biggest national income and imposed their western ideas on the country. The religious leaders in the United States were deeply upset and lead a revolution again the Shah and the United States.
Author Unknown (1994). The Federal Reserve System: Purposes and Functions (5th ed.) Published by Library of Congress
Gatsby has many issues of repeating his past instead of living in the present. A common example of this would be his ultimate goal to win Daisy back. He keeps thinking about her and how she seems perfect for him, but he remembers her as she was before she was married to Tom. He has not thought about the fact that she has a daughter, and has been married to Tom for four years, and the history there is between them. The reader cannot be sure of Gatsby trying to recreate the past until the reunion between him and Daisy. This becomes evident when Nick talks to Gatsby about how he is living in the past, specifically when Nick discusses Daisy with him. “‘I wouldn’t ask too much of her,’ Gatsby ventured. ‘you can’t repeat the past.’ I said. ‘Can’t repeat the past?’ he cried incredulously. ‘Why of course you can!’” (110). This excerpt shows how Gatsby still has not learned that eventually he will have to just accept the past and move forward with his life. If he keeps obsessing about Daisy, and trying to fix the past, more of his life will be wasted on this impossible goal. Througho...
People at risk for developing hypertension are overwhelmingly African-Americans. Nearly 50% of African-Americans will be diagnosed with hypertension. The American Heart Association reports that in 2009, 18.5 people out of 100,000 died from hypertension. Of these deaths, the majority were African-American (AHA, 2013, p. 2). These statistics make hypertension treatment a priority for this population.
Labonte, M. (January 7, 2014). Monetary Policy and the Federal Reserve; Current Policy and Conditions. Congressional Research Service.
As we are moving to the end of the course, we want to present you with the Federal Reserve System (Fed), which is the central bank of the USA. We are going to explore the roles of Fed in regularizing the economy, its function, and also the tools used in doing that. We will learn how central banks regulate the banking system and how they manage money supply in economies. We will also be presented to the financial crises lessons we can be able to understand the importance of the regulatory system; and then, we answering questions such as:
The role of religion in politics is a topic that has long been argued, and has contributed to the start of wars, schisms (both political and religious), and other forms of inter and intra-state conflict. This topic, as a result of its checkered past, has become quite controversial, with many different viewpoints. One argument, put forth by many people throughout history, is that religion and the government should remain separate to avoid any conflicting interests. This view also typically suggests that there is one, or several, large and organized religions like the Roman Catholic Church, which would be able to use their “divine” authority to sway the politics of a given state by promising or threatening some form of godly approval or disapproval. By leveraging their divine power, individual figures within a religion, as well as the religion as a whole, could gain secular power for themselves, or over others. A second view, which was developed by many theologians through history, suggests that that without religion there would be a general lack of morality in the people and leaders of a given state, which would give way to poor political decisions that would not be in the interest of the people and perhaps even God (or the gods). This argument, however, does not address the fact that morality can exist without religion. In sociology, it is commonly accepted that social norms, which include morality, can result from any number of things. Religion, laws, or the basic desire of survival can all create these norms, so it suffices to say that as a society, our morals reflect our desire to live in relative peace through the creation of laws that serve to help us to survive. The argument of whether or not religion and politics should mix...