EMBARKMENT OF QUANTITATIVE EASING AS POLICY

In response to the financial crisis in 2008, the Federal Reserve implemented all possible monetary policies without significant success. The result was the presentation of the quantitative easing (QE) policy, which is a monetary policy where the Federal Reserve purchases mid-to long-term bonds and thus liquidates the market and increases money supply. This paper will illustrate how the quantitative easing benefitted the US economy to overcome the financial crisis. It will illustrate difficulties that QE has not solved like a strong increase in national debt along with US companies' hording large amounts of cash abroad, which has made the mission of recovery very difficult for the Federal Reserve. Lastly, it will look at potential solutions besides QE to stabilize the United States economy.