Quantitative Easing (QE)

Quantitative Easing (QE) is when a central bank like the Federal Reserve buys large amounts of government bonds and other financial assets to inject money into the economy. Think of it as the Fed's emergency tool when interest rates are already near zero and the economy needs a boost. You'll hear about QE during recessions or financial crises—it matters because it can affect stock prices, inflation, and how much your savings account earns. For example, if the Fed announces a QE program, investors might expect lower borrowing costs and stronger corporate profits, which could push stock valuations higher. It's essentially the Fed printing money indirectly to keep the financial system flowing.