Quantitative Easing

About Quantitative Easing

The Federal Reserve launched quantitative easing in November 2008, buying 600 billion in mortgage backed securities. QE expanded the Feds balance sheet from 900 billion to 4.5 trillion by 2015. The program was controversial, criticized for inflating asset prices and inequality. QE kept interest rates near zero for years, fueling stock and real estate markets. The European Central Bank and Bank of Japan adopted similar programs. QE was expanded massively during COVID 19. Critics argue QE created asset bubbles and zombie companies. Proponents argue it prevented depressions. The unwinding of QE, called quantitative tightening, began in 2022.