To reduce the federal funds rate,the Fed can:

Question

Quizplus · Accepted Answer

When the Fed buys government bonds from the public, it increases the amount of money in circulation and lowers interest rates, including the federal funds rate. This is because when the Fed buys bonds, it adds money to the banking system, increasing the supply of reserves that banks have to lend out. This, in turn, makes it cheaper for banks to lend money to each other, resulting in a lower federal funds rate.

To Reduce the Federal Funds Rate,the Fed Can