The Federal Reserve System Open Market Account (SOMA) is one of the monetary policy tools used by the Federal Reserve System. It consists of the Federal Reserve's domestic and foreign portfolios. The SOMA domestic portfolio consists of U.S. Treasury securities held on both an outright and a temporary basis. The SOMA foreign currency portfolio consists of investments denominated in euros and yen.
The Federal Open Market Committee (FOMC) has designated the Federal Reserve Bank of New York to execute open market transactions on behalf of the entire Federal Reserve System. The resulting investments are held in the SOMA portfolio. Interest on the portfolio provides virtually all of the Fed's income; nevertheless, the central bank buys and sells securities purely to implement monetary policy and not for profit.
In addition, while the Treasury, in consultation with the Federal Reserve System, has responsibility for setting U.S. exchange rate policy, the New York Fed is responsible for executing foreign exchange intervention. The U.S. monetary authorities—the Treasury and the Fed—may intervene in the foreign exchange market to counter disorderly market conditions, using funds that belong to the Federal Reserve and to the Exchange Stabilization Fund (ESF) of the Treasury Department.
Famous quotes containing the words federal, reserve, system, open, market and/or account:
“Daniel as a lad bought a handkerchief on which the Federal Constitution was printed; it is said that at intervals while working in the meadows around this house, he would retire to the shade of the elms and study the Constitution from his handkerchief.”
—For the State of New Hampshire, U.S. public relief program (1935-1943)
“Her face had the seamed reserve of the old in this country [Japan]. It was a neighborhood poignantly rich in old ladies.”
—Angela Carter (1940–1992)
“I have no concern with any economic criticisms of the communist system; I cannot enquire into whether the abolition of private property is expedient or advantageous. But I am able to recognize that the psychological premises on which the system is based are an untenable illusion. In abolishing private property we deprive the human love of aggression of one of its instruments ... but we have in no way altered the differences in power and influence which are misused by aggressiveness.”
—Sigmund Freud (1856–1939)
“Manuel showed her his open hand: “Look at this finger, how meager it seems, and this one even weaker, and this other one no stronger, and this one all by himself and on his own.”
Then he made a fist: “But now, is it strong enough, big enough, solid enough? It seems so doesn’t it?””
—Jacques Roumain (1907–1945)
“It is a sign of our times, conspicuous to the coarsest observer, that many intelligent and religious persons withdraw themselves from the common labors and competitions of the market and the caucus, and betake themselves to a certain solitary and critical way of living, from which no solid fruit has yet appeared to justify their separation.”
—Ralph Waldo Emerson (1803–1882)
“Only he who has had the good fortune to read them in the nick of time, in the most perceptive and recipient season of life, can give any adequate account of them.”
—Henry David Thoreau (1817–1862)