Open Market Operations

Open market operations--purchases and sales of U.S. Treasury and federal agency securities--are the Federal Reserve's principal tool for implementing monetary policy. The short-term objective for open market operations is specified by the Federal Open Market Committee (FOMC). This objective can be a desired quantity of reserves or a desired price (the federal funds rate). The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.

The Federal Reserve's objective for open market operations has varied over the years. During the 1980s, the focus gradually shifted toward attaining a specified level of the federal funds rate, a process that was largely complete by the end of the decade. Beginning in 1994, the FOMC began announcing changes in its policy stance, and in 1995 it began to explicitly state its target level for the federal funds rate. Since February 2000, the statement issued by the FOMC shortly after each of its meetings usually has included the Committee's assessment of the risks to the attainment of its long-run goals of price stability and sustainable economic growth.

For more information on open market operations, see the article in the Federal Reserve Bulletin (102 KB PDF).

Intended federal funds rate
Change, 1990 to present

Change (basis points)
Date	Increase	Decrease	Level (percent)
2003
June 25	...	25	1.00
2002
November 6	...	50	1.25
2001
December 11	...	25	1.75
November 6	...	50	2.00
October 2	...	50	2.50
September 17	...	50	3.00
August 21	...	25	3.50
June 27	...	25	3.75
May 15	...	50	4.00
April 18	...	50	4.50
March 20	...	50	5.00
January 31	...	50	5.50
January 3	...	50	6.00
2000
May 16	50	...	6.50
March 21	25	...	6.00
February 2	25	...	5.75
1999
November 16	25	...	5.50
August 24	25	...	5.25
June 30	25	...	5.00
1998
November 17	...	25	4.75
October 15	...	25	5.00
September 29	...	25	5.25
1997
March 25	25	...	5.50
1996
January 31	...	25	5.25
1995
December 19	...	25	5.50
July 6	...	25	5.75
February 1	50	...	6.00
1994
November 15	75	...	5.50
August 16	50	...	4.75
May 17	50	...	4.25
April 18	25	...	3.75
March 22	25	...	3.50
February 4	25	...	3.25
1992
September 4	...	25	3.00
July 2	...	50	3.25
April 9	...	25	3.75
1991
December 20	...	50	4.00
December 6	...	25	4.50
November 6	...	25	4.75
October 31	...	25	5.00
September 13	...	25	5.25
August 6	...	25	5.50
April 30	...	25	5.75
March 8	...	25	6.00
February 1	...	50	6.25
January 9	...	25	6.75
1990
December 18	...	25	7.00
December 7	...	25	7.25
November 13	...	25	7.50
October 29	...	25	7.75
July 13	...	25	8.00

A basis point is 1/100 percentage point.