Quantitative easing (QE) is a monetary policy implemented by central banks to stimulate the economy by injecting money into the financial system. It involves the central bank buying government bonds or other securities from banks or financial institutions, which in turn increases the money supply and reduces interest rates. This makes it easier for businesses and individuals to borrow money, and encourages spending and investment. The goal of quantitative easing is to increase economic activity and reduce the risk of deflation during periods of economic downturn.