If the Federal Reserve wants interest rates to decrease, it will buy government bonds.

Name: If the Federal Reserve wants interest rates to decrease, it will buy government bonds.
Brand: Quizplus
Rating: 4.8 (49 reviews)

Question

Quizplus · Accepted Answer

When the Federal Reserve buys government bonds, it increases the demand for these bonds, which in turn drives down their yields or interest rates. This is because bond prices and yields have an inverse relationship - as demand for bonds increases, their prices go up and yields come down.

If the Federal Reserve Wants Interest Rates to Decrease, It