3. When the Federal Reserve sells U.S. Government securities on the open market, this tends to ___ banks reserves and ___ the money supply. How does Fed take reserves out of the banking system? 4. When the Federal Reserve sells securities on the open market it drives bond prices ___ and drives interest rates ___. How does the Fed get the banks to buy government securities from the Fed? Suppose Treasury borrows $1,000 at 6% for 5 years. Who performs open market operations? How do the NY Fed bond traders know what to do?