The cause of inflation is usually described as too much money chasing too few goods. Economists often use quite narrow definitions of money, counting things li

The cause of inflation is usually described as too much money chasing too few goods. Economists often use quite narrow definitions of money, counting things like cash and bank accounts, and maybe CD's, but never other valuable liquid financial assets like stocks and bonds and real estate. But financial decision makers absolutely do consider their full set of assets in deciding how much purchasing they can afford. How much purchasing power is chasing the available goods is really the relevant statistic for causing inflation. In quantitative easing, the Fed gave new dollars in exchange for existing financial assets (bonds, mortgage backed securities, etc). The exchanges were roughly at market value, meaning the dollars had the same purchasing power as the assets. The exchange let the Fed control long term interest rates and increase the supply of safe assets (dollars) in the market, which was needed as banks were forced to increase their holdings of safe assets to deleverage. Since total purchasing power didn't increase, there was no cause for inflation.