GO
Loading...

Federal Reserve Open Market Operations: CNBC Explains

The United States central bank, the Federal Reserve, buys and sells assets in the open market. Since the central bank has the ability to print U.S. currency, it is able to influence both the money supply and interest rates through open market operations. How do these open market operations work? Salman Khan of the Khan Academy illustrates the Fed’s open market operations.

From this video, you’ll understand:

  • How open market operations create more cash in the economy
  • How the Federal Reserve affects the supply and demand for cash
  • How banks and holdings of cash are influenced

Contact CNBC Explains

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More*

Latest Special Reports

  • File photo: Participants at a hacking conference in Germany

    A series of high profile cyber attacks has created huge economic opportunity as businesses look to fend off future attacks.

  • Whether you're young and just getting started investing or moving closer to retirement, factoring in age will keep you ahead of the game.

  • Advisor-centric content with guest columns covering practice management, investment strategies and marketing/social media.

Central Banking Explained

Corporate Accounting Explained