Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
How Central Banks Use Quantitative Tightening Without Breaking Markets
Episode 9 of Monetary Policy Explained with Fexingo: Lucas and Luna dive into quantitative tightening — the process central banks use to shrink their balance sheets after crisis-era bond buying. They walk through the specific mechanics: how the Fed lets Treasury securities roll off without reinvesting, the difference between passive QT and active asset sales, and one real case study — the Bank of Japan's 2025 taper that caused a sudden yen spike and forced a policy pause. Lucas explains why QT is often called 'stealth tightening' because it sidesteps interest-rate headlines…
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