Answer:
Open-market operations
Step-by-step explanation:
Open-market operations is a term that is used to describes a form of arrangement or process used as monetary policy, whereby the federal government through federal reserves basically trade the nation's treasury securities for the purpose of controlling the flow of in the economy, on the open market.
Hence, the tool of monetary policy the Fed uses to increase the federal funds rate from 1 percent to 1.25 percent is called OPEN-MARKET OPERATIONS