What is quantitative easing?
ASU economist explains how quantitative easing and tightening affect bank balance sheets and the credit policies set for businesses and consumers.
In this story published March 11, 2025, on The Motley Fool:
The Federal Reserve's quantitative easing (QE) and quantitative tightening (QT) directly affect banks' balance sheets by exchanging risky assets, such as mortgage-backed securities, for reserves, which are essentially the nearest equivalent to cash. By altering the risk associated with banks' assets, QE and QT can influence how banks set their credit policies for consumers and businesses.
– Domenico Ferraro, associate professor of economics
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