Answer: Increased Inflation and Reduced Interest Rates.
Explanation:
If the Fed is increasing the monetary supply in the Economy through Open Market Operations it will have the effect of increasing inflation.
A higher amount of money in the Economy usually leads to an increase in inflation because more people have money in their hands and as a result Demand increases. If supply remains the same the prices must increase.
Interest rates however will reduce because there is now a high supply of money in the Economy. Higher supply means lower price to get money which is the interest rate.
