Quantitative Easing

Market Terms

We don't know everything about the markets.  We're just devoted to learners.  Taken from those smarter than ourselves, here's how we define Quantitative Easing.

A non-traditional monetary policy in which a central bank purchases longer-term securities directly from the market.  This has the effect of increasing the money supply as well as working to encourage lending and investment.  When the bank buys these securities, it adds new money to the economy itself.  This lowers interest rates and expands the central bank’s balance sheet.  By purchasing assets with newly-created bank reserves, quantitative easing increases the money supply and provides banks with more liquidity.