What Is Quantitative Easing?

Quantitative easing is one strategy the Federal Reserve uses to stimulate the economy. Here's how it works.

The letters QE, which stand for quantitative easing, under a magnifying glass
(Image credit: Getty Images)

"Quantitative easing is an unconventional monetary policy tool used after conventional tools have become ineffective," Nancy Davis, portfolio manager of the IVOL ETF and founder of Quadratic Capital, told Fortune in November 2019.

Quantitative easing (QE) by the Federal Reserve, America's central bank, is an unconventional monetary policy tool. QE is when the Fed deliberately grows its balance sheet by purchasing assets such as government bonds and mortgage-backed securities (MBS) in the open market. 

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Will Ashworth
Contributing Writer, Kiplinger.com

Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.