Tightening and easing are two opposing economic policies used by central banks and governments to control the economy. When inflation is too high, the central bank tightens policy — raising interest rates, increasing reserve requirements, and selling bonds to pull money out of circulation.
When the economy is slowing down or in recession, the central bank eases policy — lowering interest rates, reducing reserve requirements, and buying bonds to inject money into the economy.
Easing makes borrowing cheaper, boosting investment and consumption. On the fiscal side, the government increases spending or cuts taxes (fiscal stimulus) to stimulate demand.