Tapering modifies a central bank's monetary expansion policies initiated to stimulate an economy. During a program of quantitative easing, a nation's central bank may buy asset-backed securities from its member banks, injecting money into the economy, to boost recovery.

Tapering is initiated after the quantitative easing policies have stabilized an economy and may include changing the discount rate or reserve requirements. In the United States, the Federal Reserve will also reduce its asset holdings.