This is what's called "open market operations," and it's basically the first echelon of attack on inflation. If the Fed sells government (and government agency)

This is what's called "open market operations," and it's basically the first echelon of attack on inflation. If the Fed sells government (and government agency) securities, then banks buy them, returning money to the Treasury and reducing the banks' lending liquidity. By reducing the money supply, the Fed can put a brake on inflation. The overall implication is that the Fed either wants a sharp anti-inflationary shock, or believes that longer-run secular inflation is in the cards, and is willing to cool the economy to manage that risk.