When the U.S.Federal Reserve sells or purchases Treasury securities in order to sterilize the impact of their foreign exchange market interventions,it is referred to as an.________ operation.

Question

Quizplus · Accepted Answer

When the U.S. Federal Reserve sells or purchases Treasury securities in order to offset the impact of their foreign exchange market interventions, it is referred to as an open market operation. This is a common tool used by central banks to influence the money supply and interest rates in the economy.