According to the Federal Reserve's Federal Open Market Committee (2011), the Federal Reserve "controls the three tools of monetary policyâ€â€open market operations, the discount rate, and the reserve requirements."
It goes on to say that using these three tools, the Federal Reserve influences the demand for and supply of balances that depository institutions hold at the Federal Reserve Banks, and in this way, it alters the federal funds rate ...
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29 Jan 2016