Buying Bonds- Ponen Dinero en Circulación

If the Fed buys bonds in the open market, it increases the money supply in the economy by swapping out bonds in exchange for cash to the general public. Conversely, if the Fed sells bonds, it decreases the money supply by removing cash from the economy in exchange for bonds. Therefore, OMO has a direct effect on money supply. OMO also affects interest rates because if the Fed buys bonds, prices are pushed higher and interest rates decrease; if the Fed sells bonds, it pushes prices down and rates increase.

Read more: The Fed's New Tools For Manipulating The Economy https://www.investopedia.com/articles/economics/08/monetary-policy-recession.asp#ixzz5CmJn5a8V
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