Question

To increase the supply of money, the Fed should bonds.

Answer 1

When Federal Reserve wants to increase the supply of money then it implies that it wants to administer an expansionary monetary policy.

One policy tool that Fed has to administer expansionary monetary policy is the open market purchase of government bonds.

When Fed makes such purchase then it increases the reserves with banks leading to greater lending and further money creation or increase in money supply.

Thus,

To increase the supply of money, the Fed should buy bonds.