At its core, what does the Federal Reserve policy of quantitative easing entail?
Quantitative easing is an unconventional Federal Reserve policy implemented during the Great Depression of the 1930s and the Great Recession that began in 2007. At its core, it involves printing large sums of money. The Fed then uses this money to buy things like federal government debt, private financial assets that have become bad investments (such as subprime mortgages), and the debt of government-sponsored enterprises (like Fannie Mae and Freddie Mac). The stated purpose of doing this is to lower interest rates and thus help the economy. From 2007 to 2016, during and after the Great Recession and implementation of quantitative easing, the inflation-adjusted median net worth of U.S. families declined for all wealth groups except the top 10%.