Pro lesson, preview locked
Unlock the full video and walkthrough with FinanceFlow Pro.
5:00QE Mechanics: the Fed Doesn't "Print", Watch the Balance Sheets
Everyone says the central bank "fires up the printing press". It never touches a banknote. What really happens is two electronic entries on its own ledger, and an asset swap that leaves the public no cash at all.
Quantitative easing (QE) is a large-scale asset purchase: the central bank (the Fed, the Bank of England, the ECB) buys government bonds (and sometimes other assets) in the *secondary* market. It does not lend to the government and it does not hand cash to the public. It is two book entries on its own balance sheet, performed when the policy rate is already near zero and ordinary rate cuts have run out of room.
Unlock the full lesson with Pro
The complete walkthrough, rail map and quiz for QE Mechanics: the Fed Doesn't "Print", Watch the Balance Sheets, plus every Pro lesson in the library.