If the Federal Reserve wants to lower the federal funds rate, it should

Question

Quizplus · Accepted Answer

When the Federal Reserve wants to lower the federal funds rate, it typically purchases government securities from banks. This increases banks' reserves and puts more money into circulation, which can lead to a decrease in the federal funds rate. Increasing reserve requirements would have the opposite effect and likely lead to an increase in the federal funds rate. Announcing or requesting a lower rate may not have a significant impact on the market.

If the Federal Reserve Wants to Lower the Federal Funds