👨‍🎓 Quantitative easing - what is it and how does it work?

**17/52** Macro Mornings Education

💡 New on Macro Mornings? Start here

👨‍🎓 This is part of a 52-week series on macroeconomics designed to build your knowledge step by step. Feel free to catch up on previous emails here if you'd like to start from the beginning!

Dear all,

We’ve explored how low interest rates affect the economy and your finances. Today, let’s dive into a more advanced monetary policy tool that central banks use during periods of very low interest rates - Quantitative Easing (QE).

Quantitative Easing is a strategy used by central banks to stimulate the economy when traditional monetary policy tools, like lowering interest rates, are no longer effective. Here’s how it works and what it means for the economy and your investments:

What Is Quantitative Easing?

Quantitative Easing is essentially a process where a central bank creates new money electronically and uses it to purchase financial assets, such as government bonds, from banks and other financial institutions. By buying these assets, the central bank i…