1. News & Issues  What Is Quantitative Easing?   Former Fed
Chair Ben Bernanke  Former Fed Chair Ben Bernanke greatly
expanded open market operations with Quantitative Easing.
Photo:Win Mcnamee/Getty Treasury Bond  The Fed buys Treasury
bonds from member banks with credit.  Credit: U.S. Treasury
Janet Yellen image  Current Federal Reserve Chair Janet Yellen
will taper Quantitative Easing gradually.  Credit: Federal
Reserve San Francisco  Definition: Quantitative easing (QE) is
the Federal Reserve's program of buying bonds from its member
banks. The Fed purchases U.S. Treasury notes and mortgage-backed
securities (MBS), and issues credit to the banks' reserves to
buy the bonds. The purpose of this expansionary monetary
policy is to lower interest rates and spur economic growth.
Where does the money come from to purchase these assets? The Fed
has the ability to simply create it. This unique ability is a
function of all central banks. It has the same effect as
printing moneyThe asset purchases are done by the