I just realized that many of you are still confused about QE and QT, so I’d like to share a bit of my understanding 📊

It’s simple. QE is when central banks like the Fed ( pump money into the economy by buying assets such as government bonds. The result is increased liquidity, lower interest rates, making it easier for people to borrow money for investment and consumption. The stock market usually rises along with 📈

QT is the complete opposite. Central banks reduce the amount of cash in the economy by selling assets or simply not reinvesting. Interest rates rise, borrowing becomes harder, and the market often faces downward pressure 📉

What’s interesting is that the Fed has been implementing continuous QT in recent years. But since they started cutting interest rates at the end of 2023, the Fed has shifted back to QE policy. This is a very optimistic signal for the market 🐂

Regarding overall impact: QE typically pushes asset prices up, which is good for investors. QT tends to create downward pressure. Both directly influence inflation, interest rates, and the entire economic activity.

Anyone interested in the market should follow these policies, as they shape everything from cryptocurrency prices to stocks.