<Tr> <Td> Reserve requirements </Td> <Td> The amount of funds that a depository institution must hold in reserve against specified deposit liabilities . </Td> </Tr> <P> The Federal Reserve System implements monetary policy largely by targeting the federal funds rate . This is the interest rate that banks charge each other for overnight loans of federal funds, which are the reserves held by banks at the Fed . This rate is actually determined by the market and is not explicitly mandated by the Fed . The Fed therefore tries to align the effective federal funds rate with the targeted rate by adding or subtracting from the money supply through open market operations . The Federal Reserve System usually adjusts the federal funds rate target by 0.25% or 0.50% at a time . </P> <P> Open market operations allow the Federal Reserve to increase or decrease the amount of money in the banking system as necessary to balance the Federal Reserve's dual mandates . Open market operations are done through the sale and purchase of United States Treasury security, sometimes called "Treasury bills" or more informally "T - bills" or "Treasuries". The Federal Reserve buys Treasury bills from its primary dealers . The purchase of these securities affects the federal funds rate, because primary dealers have accounts at depository institutions . </P> <P> The Federal Reserve education website describes open market operations as follows: </P>

He federal reserve board controls the amount of money available in the economy