Markets, Deals & Companies
What is quantitative easing (QE) and quantitative tightening (QT), and how do they affect markets differently from rate changes?
Model answer
Rate policy works on the SHORT end (the fed funds target). QE/QT are balance-sheet tools that work on the LONG end and on liquidity. QE: the central bank buys longer-dated Treasuries and MBS, pushing…
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