To fight against recession and give life to the economy, the central banks like the Fed lower the interest rates and also print huge amounts of money. At the height of the quantitative easing program, the Fed printed about $85 billion per month. However, it did not result in high inflation. A lot of the currency created by the Fed ended up being reserves in the banking system rather than to circulate directly into the economy. It is also used to buy assets such as bonds and shares.

This resulted in the asset prices to rise rather than the consumer prices. The more money circulates in the hands of consumers, the greater the effect in terms of inflation. The $85 billion printed per month is used to provide liquidity to the banks and rise of asset prices, but not to be in circulation in the hands of consumers.


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