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Origins of the use of Treasury debt in open market operations: lessons for the present

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  • David A. Marshall

Abstract

The Federal Reserve currently conducts open market operations primarily in Treasury securities. It has not always done so. In its earliest years, the Fed conducted open market operations primarily in private securities, such as bankers' acceptances. The Fed's choice of instruments was based both on economic doctrine and to help foster a liquid secondary market in these securities. The move to reliance on Treasury securities resulted from changes in the financial markets and the prevailing economic doctrine. These historical antecedents may have relevance for current problems facing the Federal Reserve.

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  • David A. Marshall, 2002. "Origins of the use of Treasury debt in open market operations: lessons for the present," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 26(Q I), pages 45-54.
    • Handle: RePEc:fip:fedhep:y:2002:i:qi:p:45-54:n:v.26no.1
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    References listed on IDEAS

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    1. Alfred Broaddus & Marvin Goodfriend, 2001. "What assets should the Federal Reserve buy?," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 7-22.
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    Cited by:

    1. Selgin, George & Lastrapes, William D. & White, Lawrence H., 2012. "Has the Fed been a failure?," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 569-596.

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