Glossary

Quantitative Easing (QE) is a monetary policy tool used by central banks to stimulate economic growth during periods of low inflation or economic downturns.

It involves the central bank purchasing large quantities of government bonds and other financial assets from the market, injecting money into the economy and increasing the money supply. This, in turn, lowers interest rates, encourages borrowing and spending, and helps boost economic activity. 💷

For example, during the 2008 financial crisis, the Bank of England (BoE) implemented QE by purchasing UK government bonds (gilts) to increase liquidity and promote economic growth.

Fun fact: The term "Quantitative Easing" was first used in 1995 in reference to the Bank of Japan's monetary policy. However, it was the US Federal Reserve's response to the 2008 financial crisis that brought the concept into the global spotlight. 💡