Question

While a television news reporter might state that "today the fed raised the federal funds rate from 1 percent to 1.25 percent," a more precise account of the fed's action would be as follows:?

Answer 1

"Today the Fed told its bond traders to conduct open-market operations in such a way that the equilibrium federal funds rate would increase to 1.25 percent"

Answer 2

A more precise account would be that the Fed is going to engage in open market operations to decrease the money supply which will cause interest rates to rise.