Federal Open Market Operations (FOMO)

Federal Open Market Operations (FOMO) are the actions the Federal Reserve uses to manage the economy by buying or selling government securities (like bonds) in the open market. When the Fed buys securities, it injects money into the banking system, lowering interest rates and encouraging borrowing and spending. When it sells securities, it pulls money out, raising interest rates and helping control inflation. These operations help regulate the supply of money, support stable prices, and promote maximum employment in the economy.