The Federal Reserve buys Treasury Bills in the open market.This will tend to:

Question

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When the Federal Reserve buys Treasury Bills in the open market, it increases the available for use funds with banks and dealers involved in the transaction. This injection of liquidity into the banking system increases the amount of money available for banks to lend, which can stimulate economic growth. It can also decrease short-term interest rates, as the increased supply of funds drives down the cost of borrowing. However, it does not necessarily cause a decrease in the price of Treasury Bills, cause reserves held at the Federal Reserve to decrease, or cause a decrease in the growth of deposits and loans.

The Federal Reserve Buys Treasury Bills in the Open Market