QE and QT in plain English: what do they do to a currency?

Quantitative easing creates central bank money to buy bonds; quantitative tightening reverses it. Both change the amount of money sloshing around and feed into currency values — but the chain of logic is long and often oversimplified.

QE and QT in plain English: what do they do to a currency? — central bank rate path diagram
A central bank's policy rate path across recent meetings

Try explaining QE and QT in two plain sentences each, as if to a friend who's never traded. Then the community can compare and correct.

QE and QT in plain English: what do they do to a currency? — risk-reward diagram
A risk-reward ratio of 1 to 2

The QE and QT guide gives the full picture.

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