What is ‘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.
Explaining ‘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.
Further Reading
- The fed and interest rates-a high-frequency identification – pubs.aeaweb.org [PDF]
- Retrospectives: economists and the Fed: beginnings – www.aeaweb.org [PDF]
- The housing bubble: How much blame does the fed really deserve? – aresjournals.org [PDF]
