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, during an economic slowdown, the Fed might announce a $500 billion QE program, which typically sends stock markets higher because investors expect easier borrowing conditions ahead. It's essentially the central bank printing money electronically to get cash flowing.