>but lately CBs are also buying bonds. Monetary policy, and the setting of rates, is accomplished by the buying and selling of bonds in the open market by the

>but lately CBs are also buying bonds. Monetary policy, and the setting of rates, is accomplished by the buying and selling of bonds in the open market by the Fed. They buy bonds and create money, or sell them to destroy it. This affects the amount of money "available" in the system, which affects interest rates. Of course, this transmission mechanism isn't perfect.