How can i explain The Federal Reserves System in this...

From the article you can see a reference made to several
issues: inflation, interest rates, and government
bonds.

Now the Federal Reserve System or the Fed can
influence all of these. The interest rates and inflation are influenced by the Fed
buying or selling government bonds. When the Fed sells bonds they are bought by banks;
this reduces the amount of money that the banks can lend. The banks also increase the
interest rates at which the money is lent. This decreases the money available with
borrowers. Now inflation has a direct correlation to the amount of money in the economy.
If there is more money in the economy it drives up prices as people have the resources
to buy the same products at a higher price. So this leads to a higher rate of
inflation.

Also, by selling bonds the Fed is able to
collect money which is required for all the tasks that the government performs. By
buying government bonds this amount does get reduced but it is more important right now
to infuse money into the economy for economic development, therefore here the Fed in
going ahead with this.

A careful reading of the issues in
the article followed by a more detailed study of the same will allow you to understand
how the Fed influences the whole economy by the actions it
performs.