Open market operations (OMOs)--the purchase and sale of securities in the open market by a central bank--are a key tool used by the Federal Reserve in the implementation of monetary policy. The short-term objective for open market operations is specified by the
Federal Open Market Committee (FOMC). Historically, the Federal Reserve has used OMOs to adjust the supply of reserve balances so as to keep the federal funds rate--the interest rate at which depository institutions lend reserve balances to other depository institutions overnight--around the target established by the FOMC.
The Federal Reserve's approach to the implementation of monetary policy has evolved considerably since the financial crisis, and particularly so since late 2008 when the FOMC established a near-zero target range for the federal funds rate. Since the end of 2008, the Federal Reserve has greatly expanded its holding of longer-term securities through open market purchases with the goal of putting downward pressure on longer-term interest rates and thus supporting economic activity and job creation by making financial conditions more accommodative.
For additional information, see: http://www.federalreserve.gov/monetarypolicy/bst_openmarketops.htm
The Federal Reserve Bank of New York publishes a detailed explanation of OMOs each year in its Annual Report 
. For a description of open market operations during the 1990s, see the article in the Federal Reserve Bulletin (102 KB PDF).
Intended federal funds rate, Change (basis points) and Level
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2008
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December 16
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...
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75-100
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0-0.25
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October 29
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...
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50
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1.00
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October 8
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...
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50
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1.50
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April 30
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...
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25
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2.00
|
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March 18
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...
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75
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2.25
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|
January 30
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...
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50
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3.00
|
|
January 22
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...
|
75
|
3.50
|
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2007
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|
December 11
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...
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25
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4.25
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|
October 31
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...
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25
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4.50
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September 18
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...
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50
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4.75
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2006
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June 29
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25
|
...
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5.25
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|
May 10
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25
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...
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5.00
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March 28
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25
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...
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4.75
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January 31
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25
|
...
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4.50
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2005
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December 13
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25
|
...
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4.25
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November 1
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25
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...
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4.00
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September 20
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25
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...
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3.75
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August 9
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25
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...
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3.50
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June 30
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25
|
...
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3.25
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|
May 3
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25
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...
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3.00
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March 22
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25
|
...
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2.75
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February 2
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25
|
...
|
2.50
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2004
|
|
December 14
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25
|
...
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2.25
|
|
November 10
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25
|
...
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2.00
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September 21
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25
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...
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1.75
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August 10
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25
|
...
|
1.50
|
|
June 30
|
25
|
...
|
1.25
|
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