The Federal Reserve is the central bank of the United States. The central bank issues money. So the Fed prints dollars. An institution that can print money won't invest in bonds to make money. The Fed's purpose of buying or selling bonds is to control the amount of currency. The central bank can issue money, but you can't give it away to anyone. It's a crime if the central bank just prints the money and distributes it on the street. So when it increases the volume of money, it uses a specific method, which is bond buying. Mainly government bonds. The central bank buys bonds = The central bank gives money to the private sector and the bonds return to the central bank. The central bank is an independent agency. The government can use fiscal policy through tax returns and bond issuance, and it cannot intervene in central bank monetary policy. The government borrows money by selling treasury bonds to the central bank for fiscal policy. The central bank doesn't keep the ...