When the Federal Reserve sells bonds on the open market, bond prices will fall and interest rates will increase.

Name: When the Federal Reserve sells bonds on the open market, bond prices will fall and interest rates will increase.
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When the Federal Reserve sells bonds, the supply of bonds in the market increases, leading to lower bond prices. As bond prices fall, yields (interest rates) rise because the fixed interest payments on the bonds represent a higher percentage of the lower price.

When the Federal Reserve Sells Bonds on the Open Market