[simplecomplex]

When the Fed monetizes assets (QE) it adds to bank reserves (monetary base) AND adds to demand deposits at commercial banks (money supply) that held those assets. Where does the Fed get money to purchase the assets? They create it. Obviously no “printing” is happening it’s on a computer.

When the Fed buys the assets they add credit, giving the banks more than they need in reserves. Banks then seek to make a profit by lending that extra money, thus “stimulating” the economy.

The whole point of QE is increasing liquidity by increasing the supply of money.

[brobinson]

QE is neutral to the monetary base. The central bank buys government bonds from banks and pays for them using reserves.

You can see a big spike in the money supply, but there is no corresponding increase in inflation.