Introduction Quantitative Eas Best forex trade cashbackg (QE: QuantitativeEasing) mainly refers to the intervention of the cashback forex bank to increase the supply of base money Bestforextradecashback inject large amounts of liquid funds into the market through the purchase of medium- and long-term bonds, such as Treasury bonds, after the implementation of a zero or near-zero bestcashbackprogramsforex rate policy, in order to encourage spending and borrowing, also described in simplified terms as indirectly printing additional money Quantitative refers to the expansion of a certain quantity of money issued, easing means reducing the funding pressure on banks When the marketable securities of banks and financial institutions are acquired by the central bank, the newly issued money is successfully invested in the private banking system The government bonds involved in quantitative easing are not only large in amount but also have a long cycle Generally, the monetary authorities will take this extreme approach only when conventional instruments such as interest forexbrokercashback are no longer effective In the case of economic Under normal development, the central bank, through open market operations, generally fine-tunes interest rates by purchasing short-term securities in the market, thus regulating interest rates to the set target rate; not so with quantitative easing, where the regulatory target is locked into long-term low interest rates and central banks continue to inject liquidity into the banking system, putting large amounts of money into the market i.e., under quantitative easing, the central banks implementation of the economy Monetary policy is not fine-tuning, but rather prescribing a strong medicine The way it is implemented Central banks can loosen the monetary base in two ways: by changing the price of money (i.e., interest rates) or by changing the quantity of money For many years, orthodox monetary policy has been centered on the previous policy lever However, with inflation falling back and short-term nominal interest rates approaching zero, in principle, central banks can implement expansionary in the latter way, i.e., quantity leverage Monetary policy affects economic activity by the real interest rate rather than the nominal interest rate If the economy is in deflation, then the real interest rate will remain positive even if the nominal interest rate is zero This was the situation Japan faced in 2000 - nominal interest rates had fallen to zero, but with positive real interest rates, depressed money demand was still insufficient for monetary policy to be effective This is what used to be called the &ldquo ; liquidity trap & rdquo; central banks to loosen the unconventional way of banking mainly have three first, the central bank can communicate with the outside world or quantitative easing, etc., to foster the expectation that short-term interest rates will remain low for a long time In fact, March 2001 - March 2006, the Bank of Japan to implement quantitative easing policy is the main purpose of this again, for example, in August 2003, the Federal Reserve Open Market Second, the central bank can expand the size of its balance sheet to sway inflation expectations. Third, the central bank can change the structure of its balance sheet. In this regard, the best example is long-term U.S. Treasuries In theory, the Fed can buy U.S. Treasuries on a large scale to curb rising yields; the Bank of Japan has conducted such operations during its quantitative easing policy The three types of quantitative easing mentioned above are operationally substitutable for each other, although they are conceptually different Policy implementation stages Take the quantitative easing implemented by the Fed as an example, its policy Implementation can be roughly divided into four stages [1] Zero interest rate policy The starting point of quantitative easing policy is often a significant decline in interest rates interest rate tools fail before the central bank will consider quantitative easing to interest rates economy from August 2007, the Fed cut interest rates 10 times in a row, overnight borrowing rates from 5.25% to between 0% and 0.25% Supplemental liquidity The financial crisis broke out in 2007 To 2008 during the bankruptcy of Lehman Brothers, the Federal Reserve to “ lender of last resort ” the identity of the bailout to acquire some of the companys non-performing assets, the launch of a series of credit instruments to prevent domestic and foreign financial markets, financial institutions appear excessively severe liquidity shortages the Federal Reserve in this phase, the supplemental liquidity (in fact, the injection of money) from the traditional From 2008 to 2009, the Fed decided to purchase 300 billion U.S. dollars of long-term treasury bonds and acquire a large number of mortgage-backed securities issued by Fannie Mae and Freddie Mac. In 2009, the U.S. financial institutions gradually stabilized and the Fed gradually purchased long-term U.S. Treasury bonds through open market operations in an attempt to guide the market to lower long-term interest rates and reduce the interest burden on debtors.
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