When the Fed conducts open market sales, the:

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When the Fed conducts open market sales, it sells its holdings of government securities (bonds) to the private sector. This reduces the amount of reserves that banks hold in their accounts at the Fed, which in turn reduces the amount of money that can be lent out by banks. This results in a decrease in the money supply, which the Fed may implement as a contractionary monetary policy tool to combat inflation.

When the Fed Conducts Open Market Sales, The