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The Federal Reserve Bank unveils plan for quantitative tightening : The Indicator from Planet Money To try and slow inflation, the Federal Reserve is going beyond its typical tool of raising interest rates, and adopting a policy of "quantitative tightening." So ... what is that, exactly?

The Indicator from Planet Money

Quantitative easing, meet quantitative tightening

Quantitative easing, meet quantitative tightening

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Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve, Wednesday, May 4, 2022 in Washington. (AP Photo/Alex Brandon)
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Alex Brandon/AP
Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve, Wednesday, May 4, 2022 in Washington. (AP Photo/Alex Brandon)
Alex Brandon/AP

During the pandemic, the Federal Reserve has tried to support the economy through "quantitative easing"—essentially a way the central bank injects more cash into the financial system. Today, it tapped the brakes and announced something akin to an about-face: quantitative tightening. Can this relatively untested monetary policy reign in inflation without pushing the economy into a recession?

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