What is the open market operation (OMO) process? Explain in detail.

OMO is the Federal Reserve's tool that is important in implementing Monetary Policy. The Fed may decide to buy or sell Treasury securities from the Treasury and local investors when manipulating the supply-side of money.

OMO entails the hallmark of the America Keynesian capitalism. The Federal Reserve prints paper currencies and runs the economy on systemic debt and inflation. It buys and sells Treasury securities to manipulate the aggregate stock of money in supply within the economy, ultimately determining interest rates.

OMO is excellent for achieving short-term goals for the economy. However, the power of speculation may cause long-term effects, which can be countered by current operations. Therefore, these operations should be conducted regularly.