When the Fed loans money in exchange for government bonds being posted as collateral, this is known as a

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The process described is a repo, short for repurchase agreement. In a repo, the Fed loans money to a bank or other financial institution in exchange for government bonds being posted as collateral. The borrower agrees to repurchase the bonds at a later date, often the next day, at the original price plus interest. This is a way for the Fed to inject liquidity into the financial system and manage short-term interest rates.

When the Fed Loans Money in Exchange for Government Bonds