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RE: Money 101: The Types of Money

in LeoFinance11 months ago

This is where I was reading before:
https://www.investopedia.com/articles/investing/081415/understanding-how-federal-reserve-creates-money.asp

The Fed does this in various ways, including changing the target fed funds rate with the goal of affecting other interest rates. Or it may buy Treasury securities on the open market to add funds to bank reserves. Banks create money by lending excess reserves to consumers and businesses. This, in turn, ultimately adds more to money in circulation as funds are deposited and loaned again.

Fed buys Treasury securities to add funds to bank reserves. With these new reserves, banks are able to lend more to consumers/businesses. These "new money" going out to the public is additional buying power is it not?