An open market sale of U.S. Treasury securities by the Fed will cause the Fed's balance sheet to show:

Question

Quizplus · Accepted Answer

An open market sale of U.S. Treasury securities by the Fed would result in a decrease in the asset category of securities on the Fed's balance sheet, and a decrease in the liability category of reserves held by commercial banks. This is because the Fed would be selling securities to the market, receiving payment in the form of reserves, and thereby reducing the amount of securities on its balance sheet while also reducing the amount of reserves held by banks.

An Open Market Sale of U