Central banks use QT as a tool to normalize monetary policy after periods of QE, when they have increased the money supply to stimulate the economy. By selling securities and decreasing the money supply, central banks can reduce inflationary pressure and curb asset price bubbles that may have been created by QE.

The main tool that central banks use to implement QT is open market operations, where they sell securities to commercial banks and other financial institutions. This decreases the amount of money that these institutions have available to lend, which in turn reduces the overall money supply in the economy.