I’ve been hearing these terms but don’t really understand what they mean, when and why are they used by the government and how exactly they affect prices and general standard of living.
In: 45
Pretty simple. In QE the Fed buys bonds (and mortgage backed securities) from the market. This increased demand for bonds increases the price of bonds thereby decreasing their yields. This makes bonds less attractive to investors so they put money in stocks increasing stock prices. Increased stock prices cause people to be more likely to spend money. QT is just the exact opposite.
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