Definition ∞ Quantitative easing is a monetary policy tool where a central bank injects liquidity into the economy by purchasing financial assets from commercial banks and other financial institutions. This action aims to lower interest rates and stimulate economic activity. It is typically employed when traditional monetary policy tools have become less effective.
Context ∞ The implications of quantitative easing policies enacted by major central banks are a constant subject of discussion in financial news, often influencing the performance of traditional assets and, consequently, cryptocurrencies. Analysts debate the potential inflationary effects and the impact on asset valuations when central banks expand their balance sheets. The current economic climate prompts close observation of any shifts in these monetary policies.
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