VOA慢速英语20060217a

ECONOMICS REPORT - Tools of the Trade: The Federal Reserve and the Money SupplyBy Mario Ritter

Broadcast: Friday, February 17, 2006

I'm Steve Ember with the VOA Special English Economics Report.


Ben Bernanke

That means the Federal Reserve could continue to raise target interest rates. On January thirty-first, the central bank approved its fourteenth increase since June of two thousand four. The action came on Alan Greenspan's last day as chairman.

The Federal Reserve affects interest rates mainly through its open market operations. The Fed can either buy or sell United States government securities. These bonds, bills and notes are all debt guarantees that pay interest until they are repaid. Thirty-year Treasury¹ bonds are the longest-term debt that the government sells. The Fed suspended sales in two thousand one, but started again on February ninth.

The Open Market Committee of the Federal Reserve trades in securities as a way to increase or decrease the money supply. If the Fed wants to make a purchase on the open market, it places an order through its trading offices in New York City. The Fed buys the securities from dealers². It credits the amount of the sale to the dealers' banks.

Those banks then have more money to lend, which increases the money supply. More money in the economy can drive down interest rates. People and businesses borrow more when lending costs are low.

If the Fed sells securities, this shrinks the money supply and can drive interest rates up. A smaller money supply can ease inflationary pressure.

The Federal Reserve has two other tools. One is called the discount window. This involves three special interest rates that the Fed really does control. Banks can borrow at these rates for short periods. The program serves large or small banks as well as those with seasonal³ needs, like agricultural banks.

Finally, the central bank can change the amount of money that banks are required to keep with the Federal Reserve itself. Increasing the reserves reduces the money supply, since it leaves banks with less money to lend.

This VOA Special English Economics Report was written by Mario Ritter. Read and hear our reports at www.unsv.com. I'm Steve Ember.

1 treasury   

n.宝库；国库，金库；文库

参考例句：

• The Treasury was opposed in principle to the proposals.财政部原则上反对这些提案。
• This book is a treasury of useful information.这本书是有价值的信息宝库。

2 dealers   

n.商人( dealer的名词复数 )；贩毒者；毒品贩子；发牌者

参考例句：

• There was fast bidding between private collectors and dealers. 私人收藏家和交易商急速竞相喊价。
• The police were corrupt and were operating in collusion with the drug dealers. 警察腐败，与那伙毒品贩子内外勾结。

3 seasonal   

adj.季节的，季节性的

参考例句：

• The town relies on the seasonal tourist industry for jobs.这个城镇依靠季节性旅游业提供就业机会。
• The hors d'oeuvre is seasonal vegetables.餐前小吃是应时蔬菜。