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The Federal Reserve seldom changes bank reserve requirements because such adjustments can create significant disruptions in the banking system and broader economy. Altering reserve requirements affects banks' lending capabilities, which can lead to instability in credit markets. Instead, the Fed typically uses more flexible tools, such as open market operations and interest rate adjustments, to manage monetary policy and influence economic conditions without the abrupt impacts of changing reserve requirements. This approach allows for more gradual and controlled adjustments to monetary policy.

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2w ago

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