Commentary 
Only recently did Federal Reserve Board members realize their purchases of more than $4.5 trillion in securities over the past two years were excessive. This week they will try to undo their mistake by sharply increasing interest rates and selling securities.
Specifically, the Fed plans to raise its target interest rate from 0.8 percent to 1.3 percent, then follow up with a July increase to 1.8 percent. The Fed also says it will sell $47.5 billion in securities monthly in June, July, and August; then beginning in September, increase monthly sales to $95 billion.
When the Fed purchases securities, it puts money into the economy. The additional money tends to lower interest rates, increase spending and send inflation higher. Selling securities does the opposite. It reduces available money, raises interest rates, and slows spending….