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)
“Common experience is the gold reserve which confers an exchange value on the currency which words are; without this reserve of shared experiences, all our pronouncements are cheques drawn on insufficient funds.”
—René Daumal (1908–1944)
“Nobody is glad in the gladness of another, and our system is one of war, of an injurious superiority. Every child of the Saxon race is educated to wish to be first. It is our system; and a man comes to measure his greatness by the regrets, envies, and hatreds of his competitors.”
—Ralph Waldo Emerson (1803–1882)
“To have some account of my thoughts, manners, acquaintance and actions, when the hour arrives in which time is more nimble than memory, is the reason which induces me to keep a journal: a journal in which I must confess my every thought, must open my whole heart!”
—Frances Burney (1752–1840)
“To market ‘tis our destiny to go.”
—Robert Frost (1874–1963)
“To develop an empiricist account of science is to depict it as involving a search for truth only about the empirical world, about what is actual and observable.... It must involve throughout a resolute rejection of the demand for an explanation of the regularities in the observable course of nature, by means of truths concerning a reality beyond what is actual and observable, as a demand which plays no role in the scientific enterprise.”
—Bas Van Fraassen (b. 1941)