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Quantitative easing

German: Quantitative Easing

Large-scale bond purchases by a central bank to push down long-term rates and supply liquidity to the financial system.

QE is mostly used when the policy rate is already near zero. The Fed and ECB bought trillions in bonds after the 2008 financial crisis and during the pandemic. The reverse is quantitative tightening (QT): the central bank shrinks its balance sheet by not replacing maturing bonds.