What Is Open Market Operations? How the Fed Controls Rates
Saturday 25 July 2026 at 18:45
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Interest rates don't move by announcement. Someone has to buy or sell the bonds. Open market operations are the mechanism the Federal Reserve uses to control the money supply — the day-to-day buying and selling of government securities that makes rate decisions real. When the Fed buys bonds, money enters the banking system and interest rates fall. When it sells, money is drained and rates rise. Scale this up, and you get quantitative easing and quantitative tightening — the same tool, just deployed at massive scale. Every rate cycle starts here. This is what we teach in Module 6.1 — Macro Indicators and Sentiment. https://youtu.be/1xf-OT5jjWM
Key Takeaways
Open market operations are when the Fed buys or sells government securities to control the money supply
Fed buys bonds — money enters the system and interest rates fall
Fed sells bonds — money drains from the system and rates rise
Scale it up and you get QE and QT — the same mechanism at massive scale
This is what we teach in Module 6.1 — Macro Indicators and Sentiment
Get the full breakdown and the complete Larke Cycle framework.
For educational purposes only. Not financial advice. Past performance does not guarantee future results. Trading involves risk. Consult a qualified financial adviser before making investment decisions.
I'm Russell Larke — BA (Hons) Business Management, currently completing an MSc in Systems Thinking in Practice, with plans to pursue a doctorate. I've run an environmental consultancy as Managing Director and have traded financial markets for years. I teach the Larke Cycle — a testable framework for understanding market structure beyond chartism. Regards, Russell Larke BA (Hons) Business Management | MSc Candidate (Systems Thinking) Beyond the Chart
What Is Open Market Operations? How the Fed Controls Rates
Interest rates don't move by announcement. Someone has to buy or sell the bonds. Open market operations are the mechanism the Federal Reserve uses to control the money supply — the day-to-day buying and selling of government securities that makes rate decisions real. When the Fed buys bonds, money enters the banking system and interest rates fall. When it sells, money is drained and rates rise. Scale this up, and you get quantitative easing and quantitative tightening — the same tool, just deployed at massive scale. Every rate cycle starts here. This is what we teach in Module 6.1 — Macro Indicators and Sentiment. https://youtu.be/1xf-OT5jjWM
Key Takeaways
Get the full breakdown and the complete Larke Cycle framework.
Join the Full Course on Skool →
For educational purposes only. Not financial advice. Past performance does not guarantee future results. Trading involves risk. Consult a qualified financial adviser before making investment decisions.
I'm Russell Larke — BA (Hons) Business Management, currently completing an MSc in Systems Thinking in Practice, with plans to pursue a doctorate. I've run an environmental consultancy as Managing Director and have traded financial markets for years. I teach the Larke Cycle — a testable framework for understanding market structure beyond chartism. Regards, Russell Larke BA (Hons) Business Management | MSc Candidate (Systems Thinking) Beyond the Chart