We Just Learned Another Lesson About What QE Actually Does

Large Scale Asset Purchases by central banks — commonly known as QE — are a popular tool with surprisingly little agreement on what’s actually accomplished.

Probably the most popular idea out there is that buying Treasuries and other longer-dated bonds depresses yields (vs. what they otherwise would be) and that helps stimulate lending. And maybe it helps boost asset prices via the “search for yield” mechanism.