Which committee within the Federal Reserve is responsible for open market operations?

The Federal Open Market Committee (FOMC) is the body within the Federal Reserve System that oversees open market operations. Open market operations refer to the buying and selling of government securities by the Federal Reserve to regulate the money supply and influence interest rates.

The FOMC meets regularly to assess the economic conditions and determine the appropriate stance of monetary policy, which includes decisions on whether to expand or contract the money supply. By conducting these operations, the FOMC directly impacts liquidity in the economy, thus playing a crucial role in implementing monetary policy to achieve macroeconomic goals such as controlling inflation and fostering employment.

In contrast, the other committees listed do not have the authority or the responsibility for open market operations. The Monetary Policy Committee is not a recognized committee in the context of the Federal Reserve, the Federal Reserve Advisory Council mainly offers advice on various issues rather than directly manipulating monetary policy, and the Budget Oversight Committee focuses on budgetary matters rather than monetary policy actions. This distinction reinforces the role of the FOMC as the key committee in managing open market operations.