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, the Great Recession that began in 2007, and the Covid-19 pandemic. At its core, it involves printing large sums of money that the Federal Reserve uses to buy things like federal government debt and private financial assets that have become bad investments (like subprime mortgages). 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%.