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 directly into the economy. Central banks do this when interest rates are already near zero and the economy needs a boost—they're essentially printing money electronically to encourage lending and spending. You'll hear about QE during recessions or financial crises, and it matters because it can affect stock prices, inflation, and how much your savings earn. For example, during an economic downturn, the Fed might announce a QE program, which often sends stock markets higher because investors expect easier borrowing conditions ahead.