When the federal reserve sells government securities to the public what happens to money supply?

If the Federal Reserve is a net seller of government bonds, what happens to the:

• Money supply- A reduction in the money supply will increase short-term rates.

• Interest rate- To the extent that the bond markets see this continuing, it will also reduce long term rates, which are based on the market's expectations of future inflation.

• Economy- it drains money from the system