Under quantitative easing a central bank creates reserves and buys government bonds (and sometimes other assets) from the market. That raises bond prices, lowers their yields, and pushes investors towards riskier assets. The RBA, the Fed and most major central banks used it after 2008 and in 2020.
Quantitative tightening is the reverse: the central bank stops reinvesting maturing bonds, so its balance sheet shrinks and more bonds must be held by private investors.
Why it matters
QE lowers long-term borrowing costs and lifts asset prices; QT works the other way, gradually. Central bank balance sheets are a useful gauge of how much support markets are getting beyond the headline policy rate.
See the data: Fed balance sheet, RBA balance sheet.
General information, not advice.