I'm just learning how the FED's work and I read an article that said.. Although the Fed has the power to do so, changing the amount of reserve cash a bank has to have can have dramatic effects on the economy; for this reason, this tool is rarely used. The Fed more often alters the supply of reserves available by buying and selling securities. When the Fed sells securities, it reduces the banks' supply of reserves. This makes interest rates go up. When the Fed buys securities, it increases the banks' supply of reserves. This makes interest rates go down. When it says the Fed's sell securities, are they refering to the Fed sell more Treasury bills, notes and bonds? or do they also sell stock?