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How often does the Federal Reserve engage in open market operations?

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How often does the Federal Reserve engage in open market operations?

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[The Federal Reserve engages in open market operations on a daily basis-not just when they change the target federal funds rate. The amount that banks hold in reserves changes throughout the year and the Federal Reserve will buy or sell bonds to influence reserve levels and maintain the target federal funds rate at the desired level.] Discount Rate The discount rate is the interest rate the Federal Reserve charges banks if banks borrow reserves from the Federal Reserve itself. Banks seldom borrow reserves from the Federal Reserve and tend to rely more on borrowing reserves from other banks when they are needed. The discount rate is often changed along with the discount rate, but the change does not have a very important effect. In this announcement, the discount rate is not changed. (Note: In January of 2003, the discount rate was changed to a level one-half of one percent above the target federal funds rate. The discount rate had normally been about one-half of a percent less than the

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