Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
Why Central Banks Are Buying Government Bonds Again
In this episode, Lucas and Luna explore the quiet resurgence of bond purchases by central banks in 2026. After years of quantitative tightening, several major central banks—including the Bank of Japan and the European Central Bank—have resumed net buying of government bonds. Lucas explains the mechanics: these are not crisis-level QE programs but smaller, steady purchases aimed at managing yield curve control and providing liquidity. Luna brings up the Bank of Japan's recent shift to yield curve control 2.0, where they buy bonds to cap the ten-year yield at 1.5%. They discuss the Federal…
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