What often triggers quantitative easing measures?

Quantitative easing (QE) measures are typically implemented by central banks in response to economic challenges, particularly during a recession or economic downturn. When a country's economy is struggling, it can experience lower consumer spending, decreased business investment, and higher unemployment rates. In such scenarios, traditional monetary policy tools, like lowering interest rates, may become ineffective (especially if rates are already near zero).

To stimulate the economy, central banks resort to quantitative easing, which involves purchasing financial assets, such as government bonds, to inject liquidity into the economy. This increase in the money supply aims to lower interest rates and encourage lending and investment, ultimately supporting economic growth.

While high employment rates, stronger stock market performance, and increased consumer confidence are indicators of a healthy economy, they do not trigger QE. Instead, these conditions generally reflect a stable or growing economy where such measures may not be necessary.