Quantitative easing (QE), explained
Quantitative easing (QE) is a non-traditional monetary policy tool used by central banks, particularly when interest rates are already low and cannot be reduced further.
It was popularized during the 2008 global financial crisis when traditional monetary tools, like lowering interest rates, were insufficient to stimulate economic growth.
The main goal of QE is to boost the economy by increasing the money supply. This is achieved by encouraging banks to lend more and making borrowing cheaper for consumers and businesses. When central banks implement QE, they purchase government bonds or other securities from the market, injecting cash into the financial system.
Even though people sometimes say QE is like “printing money,” it’s not the same as making new physical cash. Instead, it increases the amount of digital money — meaning the balances held in bank accounts — in the economy. This