Quantitative Easing (QE)

A monetary policy tool in which a central bank purchases large quantities of government bonds and other securities to inject liquidity into the financial system and lower long-term interest rates. The Federal Reserve deployed QE aggressively during the 2008 financial crisis and again in 2020 during the COVID-19 pandemic, expanding its balance sheet to nearly $9 trillion. Critics argue QE inflates asset prices and widens wealth inequality, while proponents credit it with preventing deeper recessions.