When the Federal Reserve buys U.S.government securities on the open market,it drives bond prices ____ and drives interest rates ___.

Question

Quizplus · Accepted Answer

When the Federal Reserve buys U.S. government securities on the open market, it increases the demand for those securities, which drives their prices up. As bond prices increase, their yields (interest rates) fall, since the amount paid in interest remains fixed.

When the Federal Reserve Buys U