Alright. So now let's go through the open market operations. So what are open market operations? This is when the Fed buys and sells US Treasury Securities. Generally, it's US Treasury Securities such as bonds or more likely treasury bills, which are short-term treasury investments. They buy and sell them with the public. And when I say public, it's not like you can call up the Fed and say, hey, let me buy some treasury securities. No, they're dealing with banks in this case. They're dealing with the banks, and the banks are part of the public in this idea. Okay? So, the Fed having money is taking money away from the public. The Fed giving money to banks is money going into the hands of the public. And remember, everything we're focused on here is how much money is in the money supply. Okay? So the Federal Open Market Committee, right? FOMC, they're the ones that handle the open market operations. And they do this most often to deal with the money supply because it gives them the most control. They get the most control over the money supply because they can set the volume of purchases and sales. Okay. So think about it. They can buy or sell \$100,000,000 in US Treasury securities, or they can do \$200,000,000, \$500,000,000. They can do \$50,000,000, \$20,000,000. The size of the open market operation is totally up to them. So it gives them a lot more control over how they're going to adjust the money supply. Another great benefit of doing open market operations is that they're easily reversible. If they make an open market operation and they see that it's having negative impacts, well, they can do the opposite and just immediately cancel out what was happening. Such as, if they buy \$20,000,000 in US Treasury securities from the banks, and then they see that things aren't going so well. Well, they can just sell them back to the banks, get the \$20,000,000 back, and reverse what just went through. And they can be quickly executed, right? There's not a whole bunch of administrative burden going on here. The committee makes a decision and they make it happen. Okay? So there are 2 things they can do. They can either buy or sell US Treasury Securities. Okay? So if they're buying US Treasury Securities, think about the Fed. Okay? In this situation, the Fed is going to be like the government. We're going to think about the Fed as being like the government and the banks being like the public. The ones who have the money in the public would be in the money supply. If the money is in the Fed, well, it's not in the money supply. So if they're buying US Treasury Securities, we have the Fed buying. So they're going to give to the banks. What are they giving to the banks? If they're buying US Treasury Securities, they're giving the banks money, and they're getting treasury securities in return. Right? So in this situation, who's getting the money in this case? The banks, right? The banks are getting the money. So when the Fed buys US securities, there's more money in banks. And when the banks have the money, that's like the public having the money. So there's more money supply. Okay? The money supply is higher when they buy US securities. And this is where a lot of students get tripped up because you have to follow the logic of who's getting the cash and who's getting the securities. When the Fed gets the securities, well, they're paying out cash to the public. Okay? And then it's the opposite in the second situation. I'll do it here in blue. So Fed and banks. Again, in this case, I'll do it a little further down so we have space. Now in this case, they're selling treasury securities. So what is the Fed giving to Banks and what are Banks giving to the Fed? In this case, the Fed is giving the Banks treasury securities, right? The Fed is selling treasury securities and they're getting money from the banks. So who has the money now? Do the banks have the money or the Fed? The Fed has the money in this case, right? The Fed is going to have the money so there's less money in the banks because now they have treasury securities instead of the dollars. And when there's fewer dollars in the banks, that's less money supply. Okay? So this is the idea. The fed is trying to control the supply of money, which is that M1 that we talked about, right? The currency in circulation plus the checkable deposits. This is them controlling that amount that's in the public, okay? And we're going to see why they want to control that amount when we go to the graphs and we kind of see the demand for money and the supply for money on the graph. But for now, it's important to just understand how they conduct the open market operations. And it's as simple as buying and selling US securities. Okay? So when we're studying monetary policy, it's important to think like this. The Fed, we're going to say as the government. Now, they're not exactly the government, but we're just going to say it like that. They're the Central Bank of the US and they're going to be the insiders, right? They're not part of the public and then the public is going to be banks and of course, consumers as well. Right? Consumers. But mostly, the Fed is only going to be dealing with banks, right? With the the Fed is mostly just going to be dealing with the banks, and going through these operations with the banks. It's not like you can call up the Fed yourself. Okay? So the Fed is the government and the banks are the public. Oh, we're seeing who has the money. Does the Fed get the dollars or do the banks get the dollars? So the money supply is the money in the hands of the public. Okay? So when the money is in the hands of the public, it's in the money supply. It's circulating. And that's what we're concerned with is how much is in the money supply and how is that affecting the markets, alright? So that's about it here. Let's go ahead and move on to the.