h of information on economic conditions in virtually every corner of the nation. This information is used by the Federal Open Market Committee (FOMC) and the Board of Governors in reaching major decisions about monetary policy. The New York City Federal Reserve Bank takes the lead in this area (Purposes and functions, 1997).
Information from directors and other sources gathered by the Reserve Banks is also shared with the public in a special report informally called the Beige Book which is issued about two weeks before each meeting of the FOMC. The St. Louis Federal Reserve Bank takes a lead in gathering and presenting this information (Purposes and functions, 1997).
Functions of the New York City Federal Reserve
The manager of the System Open Market Account at the New York Fed, who executes open market operations on behalf of the entire Federal Reserve System, uses the directive as a guide in making decisions about the day to day sale or purchase of securities (Open market operations, 1997).
Open market operations are the Federal Reserve's most flexible means of carrying out monetary policy. Through open market operations, the Federal Reserve buys and sells U.S. government securities in the secondary market in order to adjust the level of reserves in the banking system. Open market operations enable the Federal Reserve to manage money supply growth and reach other monetary policy targets (Open market operations, 1997).
Open market operations are one of three basic tools used by the Federal Reserve to reach its monetary policy objectives. The other tools involve changing the terms and conditions for borrowing at the discount window and adjusting reserve requirement ratios. The sale or purchase of U.S. government securities in the "open market," also known as the secondary market, is the Federal Reserve's most flexible means of carrying out its objectives. By adju
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