GO
Loading...

Enter multiple symbols separated by commas

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

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Latest Special Reports

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

  • For Small Business Week, CNBC goes coast-to-coast and out onto Main Street with business owners powering the US economy.

  • Tips on the best-performing portfolio strategies and global market trends that can help you become a smarter investor.