Pronunciation: [kˈiː] (IPA) 
The spelling of the word "QE" is derived from the initials of the term "quantitative easing." The word is pronounced as [kwɒntɪteɪtɪv i:zɪŋ]. The first syllable "quant" is pronounced as "kwont" with a silent "e" at the end. The second syllable "i" is pronounced as "ee" and the last syllable "zing" is pronounced as "zɪŋ." QE is a monetary policy used by central banks to increase the money supply and stimulate the economy.
QE stands for quantitative easing, which is an economic monetary policy that is implemented by central banks to stimulate the economy in times of recession or low growth. It involves the central bank purchasing government bonds or other financial assets from the open market, thus injecting a significant amount of money into the economy.
The goal of QE is to increase the money supply, lower interest rates, and encourage lending and investment. By purchasing government bonds, the central bank increases the demand for these bonds, reducing their yields and indirectly lowering interest rates. This, in turn, encourages borrowing and spending, leading to increased economic activity.
QE is seen as an unconventional policy tool because it expands the central bank's balance sheet, effectively increasing the money supply. This policy is typically used when traditional monetary policy tools, such as lowering interest rates, have become ineffective. It is also employed when deflationary pressures emerge, as QE can help prevent a spiral of falling prices.
However, QE does carry risks. One concern is that it can lead to inflation if too much money is injected into the economy. Additionally, excessive reliance on QE can create asset price bubbles and distort financial markets. Consequently, central banks must carefully monitor and control the amount of QE implemented to balance its benefits and risks.
Overall, QE is a monetary policy tool used by central banks to stimulate economic activity, boost borrowing and spending, and combat deflationary pressures during times of recession or low growth.
