FED Pass

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DEFINITION of 'FED Pass'

An action taken by the Federal Reserve that looks to increase the availability of credit by moving additional reserves into the banking system. The supply of loans is increased as more funds are injected into major banks, typically allowing lenders to originate more mortgages at lower interest rates.

INVESTOPEDIA EXPLAINS 'FED Pass'

The FED Pass is an aspect of monetary policy that aims to affect the amount of money in circulation and increase lending. This action could be used as a method to combat economic difficulties, such as a credit crunch.

RELATED TERMS
  1. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  2. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  3. Federal Reserve Board - FRB

    The governing body of the Federal Reserve System. The seven members ...
  4. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
  5. Credit Crunch

    An economic condition in which investment capital is difficult ...
  6. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
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