A team of young (I mean young - half my age or less), whip-smart men and women begin each workday by analyzing all the factors affecting the money supply. They then gauge the appropriate amount of buying or selling for the Fed's portfolio of government securities required to maintain our target rate. When more liquidity is required, the Domestic Trading Desk purchases securities.
If tightening is in order, the Desk sells into the market, replacing idle balances with investment securities and thereby marginally reducing the liquidity in the banking system. Though these professionals are young, money market activity conducted by the New York Fed is an established discipline more than eighty years old.