In fact, the Federal Reserve has not used QE (Quantitative Easing) many times, or it should be said that the Federal Reserve has not been using QE for a long time. QE should be considered a new tool, first used in 2008, and it has only been implemented four times since then. A summary of these four experiences shows that they are all more or less related to economic recessions.

Among them, two instances of QE were implemented due to economic recessions, while the other two were initiated after a recession to prevent a further downturn or to promote economic recovery.

In less precise terms, if there is no expectation of a recession or if a recession has already occurred, the Federal Reserve is unlikely to resort to QE as a last resort. Therefore, to answer the question from friends, ending QT (Quantitative Tightening) does not mean that QE will immediately follow. If QT ends and the U.S. federal funds rate returns to zero, but economic risks remain significant, then the Federal Reserve may consider using QE.

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