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Glossary of Stock Market Terms

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Financial Terms By: f
Federal Open Market Committee (FOMC)

The body that is responsible for setting the interest rates and credit policies of the Federal Reserve System. The FOMC sets a target level for the overnight fed funds rate, as the fed funds market has historically facilitated the transfer of the most liquid funds among depository institutions. The New York Fed then uses open market operations to change the supply of reserves in the system which, in conjunction with IOER, influence overnight fed funds to trade around this policy target rate or within the target rate range.

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