QUICK DEFINITION
Quantitative Easing is large-scale asset purchases by a central bank intended to ease financial conditions when conventional policy tools are constrained or insufficient.
WHY IT MATTERS
Why Quantitative Easing matters in bond markets
QE can affect term premia, liquidity, portfolio allocation and expectations about the future policy stance.
MARKET CONTEXT
How to think about it
Bond investors use quantitative easing as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Quantitative Easing important for fixed-income investors?
← Back to the Bond Market Glossary Yes. QE can affect term premia, liquidity, portfolio allocation and expectations about the future policy stance.