Quantitative easing

A central bank buying bonds to push money out

In detail

When the policy rate can go no lower, a central bank buys government bonds and other assets in bulk to push money into the market. Yields stay pinned down and money looking for a home tends to move toward shares and property. Unwinding it raises the question of how to shrink those holdings, and that process moves markets in its own right.

Example

Programmes have run at scales such as $80 trillion of bond buying a year.

Related terms

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For learning, not investment advice. Decisions are your own.

StockFit · TrueNorthLabs Inc.