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:
“Goodbye, boys; I’m under arrest. I may have to go to jail. I may not see you for a long time. Keep up the fight! Don’t surrender! Pay no attention to the injunction machine at Parkersburg. The Federal judge is a scab anyhow. While you starve he plays golf. While you serve humanity, he serves injunctions for the money powers.”
—Mother Jones (1830–1930)
“I understood that all the material of a literary work was in my past life, I understood that I had acquired it in the midst of frivolous amusements, in idleness, in tenderness and in pain, stored up by me without my divining its destination or even its survival, as the seed has in reserve all the ingredients which will nourish the plant.”
—Marcel Proust (1871–1922)
“I am fearful that the paper system ... will ruin the state. Its demoralizing effects are already seen and spoken of everywhere ... I therefore protest against receiving any of that trash.”
—Andrew Jackson (1767–1845)
“The gates of Hell are open night and day;
Smooth the descent, and easy is the way:
But, to return, and view the cheerful skies;
In this, the task and mighty labour lies.”
—Virgil [Publius Vergilius Maro] (70–19 B.C.)
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—Ralph Waldo Emerson (1803–1882)
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—Horace Walpole (1717–1797)