What is quantitative easing?

There's a lot of fuss about the US Federal Reserve's plans for second round of money printing, or 'quantitative easing'. Tim Bennett explains what it is and why they're doing it.

After months of speculation, last week America's central bank, the Federal Reserve, finally launched the next phase of quantitative easing (QE2). The Fed will pump another $600bn into the American economy between now and June. But how will it do this and, more importantly, what is it hoping to achieve?

What's the problem?

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.