Quantitative easing (QE) is large-scale central bank purchases of long-maturity government debt and other assets to push up bond prices and push down long-term interest rates, used when short-term rates are near zero or negative. The Bank of England bought £895 billion in bonds after first deploying QE in March 2009; the Federal Reserve's securities holdings have fallen by more than $2.2 trillion since quantitative tightening began in June 2022.
What is quantitative easing and how does it work?
Quantitative easing (QE) is a policy under which central banks conduct large-scale asset purchases, usually of long-maturity government debt but also private assets such as corporate debt or asset-backed securities, according to the Federal Reserve Bank of St. LouisCITE:E1. The Bank of England describes its own version of the mechanism directly: QE involves buying bonds to push up their prices and bring down long-term interest ratesCITE:E3. In other words, the purchases themselves are the transmission channel — higher bond prices translate mechanically into lower long-term yields.
Under what conditions do central banks turn to QE?
Central banks typically deploy QE in unconventional circumstances, specifically when short-term nominal interest rates are very low, at zero, or even negative, the Federal Reserve Bank of St. Louis notesCITE:E2. This is the condition the Bank of England says it met at the onset of the Global Financial Crisis: it first began using QE in March 2009 in response to that crisisCITE:E4. The two facts line up — QE is presented as a tool for when conventional rate cuts have run out of room, and the Bank of England's own timeline places its first use of the tool at a moment of acute financial stress.
What was the scale of the Bank of England's QE program?
The Bank of England says it bought a total of £895 billion worth of bonds over the course of its QE programCITE:E5. That figure is the Bank's own cumulative tally of purchases made under the buying-to-lower-yields mechanism it describes, spanning from the program's March 2009 start.
How large is the impact of quantitative tightening on the Federal Reserve's balance sheet?
The Federal Reserve says its total securities holdings have declined by more than $2.2 trillion since balance sheet reduction — quantitative tightening (QT) — began in June 2022CITE:E7. This is the reverse operation to QE: instead of buying assets to add them to the balance sheet, the central bank lets holdings run off, shrinking the balance sheet it built up through purchases.
| Program | Institution | Starting point | Cumulative scale |
|---|
| QE | Bank of England | March 2009CITE:E4 | £895 billion in bonds purchasedCITE:E5 |
| QT | Federal Reserve | June 2022CITE:E7 | Securities holdings down more than $2.2 trillionCITE:E7 |
What this means: The evidence here traces both ends of the same policy tool. The Bank of England's £895 billion in bond purchases, launched in March 2009 in response to the Global Financial CrisisCITE:E4CITE:E5, illustrates the expansion side that the Federal Reserve Bank of St. Louis describes generically as QE — buying assets when short-term rates are already near zero to push down long-term yieldsCITE:E1CITE:E2. The Federal Reserve's own figures show the unwind side of that same mechanism: more than $2.2 trillion in securities holdings run off since June 2022CITE:E7. Together, the two data points show a central bank balance sheet expanding by purchase and later contracting by runoff, using the mirror-image of the same operation.
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The two figures in this record sit on opposite sides of the same operation: the Bank of England accumulated £895 billion in bond holdings starting in March 2009, while the Federal Reserve has since unwound more than $2.2 trillion of its own holdings starting in June 2022. Read together, they confirm that QE and QT are not separate tools but the same balance-sheet lever run in opposite directions — one adding duration to the market by buying, the other removing it by letting holdings run off. Because the Federal Reserve's own framing ties QE's use to near-zero or negative short-term rates, the metric worth tracking next is simply whether the pace of that post-June-2022 securities runoff continues, since that pace is the clearest signal of how far the unwind side of this cycle still has to go.