If the Fed wanted to put downward pressure on the FFR, it would likely:

Question

Quizplus · Accepted Answer

When the Fed purchases government bonds from banks, it injects money into the banking system, which puts downward pressure on the FFR. This is because banks have more money to lend out, which increases the supply of loanable funds and lowers the cost of borrowing. Selling government bonds to banks would have the opposite effect, as it would take money out of the banking system and raise the cost of borrowing. Increasing the reserve requirement and discount rate would also have the effect of raising the cost of borrowing and reducing the supply of loanable funds, which would raise the FFR. Making a request to Congress to reduce government spending is not a direct policy tool of the Fed and would not directly impact the FFR.

If the Fed Wanted to Put Downward Pressure on the FFR