Quantitative easing (QE) is a monetary policy used by central banks, like the Federal Reserve, to stimulate the economy when traditional methods, such as lowering interest rates, become ineffective. In QE, the central bank buys financial assets, such as government bonds, from banks. This increases the money supply, lowers interest rates, and encourages banks to lend more money to businesses and consumers. As a result, QE aims to boost spending and investment, helping to support economic growth and reduce unemployment. While it can be effective in the short term, some worry about potential long-term effects, such as inflation or asset bubbles.