2. Control of the Monetary Base The Fed exercises control overthe monetary base mainly through two ways its purchases or sale of government securities in the open market its extension of discount loans to banks Essential way y open market operations(oMO open market purchase OMP) from banks or from the public open market sale oMs) to banks or to the public2. Control of the Monetary Base • The Fed exercises control over the monetary base mainly through two ways • its purchases or sale of government securities in the open market • its extension of discount loans to banks Essential way open market operations(OMO) • open market purchase (OMP) from banks or from the public • open market sale (OMS) to banks or to the public