Definition
A central bank buying large amounts of bonds to push long-term interest rates down.
The story
When short-term rates are already near zero, the Fed can't cut much further. So it goes shopping for long-term bonds. Buying lots of them pushes their prices up and their yields down, which makes mortgages and business loans cheaper.
Why markets watch it
It has tended to support stocks and bonds by lowering borrowing costs.
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms