Picture two scenarios: Scenario 1: Fed buys $20 billion of corporate bonds per month from Microsoft. Scenario 2: Fed does not buy $20 billion of corporate bon

Picture two scenarios: Scenario 1: Fed buys $20 billion of corporate bonds per month from Microsoft. Scenario 2: Fed does not buy $20 billion of corporate bonds per month from Microsoft. Consider all other things being equal, in the first scenario Microsoft's borrowing costs are drastically reduced. This means that Microsoft has more money. This means that Microsoft is able to hire more people, that the people that work for them get larger bonuses because they are typically tied to the profitability of the company. This puts more money into real people's hands to buy toilet paper and golf clubs. That then multiplies throughout the economy. Suggestions for additional reading if you are really interested in these things: 1. Money Multiplier https://www.albany.edu/~bd445/Economics_350_Money_and_Banking_Slides_Spring_2013/Money_Multiplier.pdf https://www.albany.edu/~bd445/Economics_350_Money_and_Bankin... 2. M1 vs M2 money supply https://www.investopedia.com/terms/m/moneysupply.asp https://www.investopedia.com/terms/m/moneysupply.asp 3. Fractional reserve banking https://www.investopedia.com/terms/f/fractionalreservebanking.asp https://www.investopedia.com/terms/f/fractionalreservebankin... 4. Fed open market operations https://www.investopedia.com/terms/o/openmarketoperations.asp https://www.investopedia.com/terms/o/openmarketoperations.as...