How Central Banks Use Quantitative Easing for Crisis Response

Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates · Jun 21, 2026 · 7m · transcript

In this episode of Monetary Policy Explained with Fexingo, Lucas and Luna dive into quantitative easing — the unconventional policy tool central banks deploy when traditional rate cuts hit zero. Using the Federal Reserve's response to the 2008 financial crisis as the central case, they walk through how QE works in practice: the mechanics of large-scale asset purchases, the impact on long-term interest rates and bank reserves, and the tricky exit strategy of quantitative tightening. They explore specific numbers — like how the Fed's balance sheet ballooned from under $1 trillion to…