Open-market operations consist of the buying and selling of government securities by the Fed.
Central banks also use government securities in open-market operations to influence interest rates.
Dollars that had been lent out through the Fed's various borrowing facilities were then soaked up in its open-market operations.
They could easily have done so by employing so-called open-market operations, which the Federal Reserve and other central banks engage in constantly.
The central bank has also shifted towards a tighter stance in recent weeks, withdrawing cash from the economy via its open-market operations.
The Fed threw open its emergency lending facilities to investment banks, as well as accepting a much broader range of collateral in its open-market operations.
It seems that the market is banking on the Fed chief making explicit promises to spark the economy and capital markets with creative open-market operations.
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Eventually, as more and more domestic bonds back the currency, the board can engage in open-market operations, buying and selling the bonds to nudge interest rates, just as central banks do.
In times of less turmoil, the central bank generally only deals with primary dealers, a group of 20 big banks and brokerage houses with which the New York Federal Reserve conducts its open-market operations, buying and selling government securities to guide the federal funds rate.
It has a time-tested way to do this through its open market operations-sell bonds from its portfolio, which will soak up excess cash used to pay for those bonds.
It has a time-tested way to do this through its open market operations--sell bonds from its portfolio, which will soak up excess cash used to pay for those bonds.
As the storm gathered during 2008, the Fed aggressively eased monetary policy by using such open market operations (supplemented by discount rate reductions) to drive short-term interest rates to near-zero levels.
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