Federal Open Market Operations

Federal Open Market Operations (FOMO) are the actions taken by the Federal Reserve, the central bank of the United States, to control the money supply and influence interest rates. This involves buying or selling government securities in the open market. When the Fed buys securities, it adds money to the banking system, lowering interest rates and encouraging borrowing and spending. Conversely, selling securities takes money out of circulation, raising interest rates to curb inflation. These operations are a key tool for implementing monetary policy, helping to stabilize the economy and promote employment and price stability.