Open Market Operations Explained

Next video:
Loading the player...

Open market operations refers to a monetary policy tool in which central banks buy and sell bonds to regulate the money supply in the economy. The United States employs open market operations through the Federal Reserve Bank.

Related Articles
  1. Economics

    Keynesian Economics

    Learn more about this economic theory that incorporates government intervention in the marketplace.
  2. Economics


    Capitalism is an economic system in which the free market alone controls the production of goods and services. Its key features include open competition, the profit motive of producers and private ...
  3. Economics

    The Balance Of Trade

    The balance of trade is the difference between a country’s imports and exports. A trade deficit occurs when a country buys or imports more goods from other countries than it sells or exports. ...
  4. Economics

    Positive And Normative Economics

    Learn the difference between these two declarative statements and what they mean in the world of economics and finance.
  5. Investing

    Quantitative Easing

    Learn more about this monetary policy employed by central banks.
  6. Investing

    Overnight Rate

    Learn about how banks use this interest rate when lending to other banks.
  7. Investing

    What a Fed Delay Means for the ECB & BoJ

    The Fed’s continued delay has repercussions for more than just the U.S. economy and markets. The ECB and the BoJ may support the case for stocks in Europe.
  8. Economics

    Understanding Income Inequality

    Income inequality refers to the uneven distribution of income across a single economy.
  9. Economics

    Who is a Hawk?

    In the economic sense of the word, a hawk is someone who believes high interest rates should be maintained to keep inflation low.
  10. Investing Basics

    Explaining Fixed Exchange Rates

    A government using a fixed exchange rate has linked the value of its currency to the value of another country’s currency, or the price of gold.

You May Also Like

Hot Definitions
  1. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  2. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  3. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  4. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  5. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  6. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!