easy money

Easy money

See: Tight money

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easy money

A condition of the money supply in which the Federal Reserve permits substantial funds to accrue in the banking system, thereby cutting interest rates and facilitating the acquisition of loans. In the resultant period when borrowing is relatively easy and inexpensive, security prices may be initially stimulated. But an extended period of easy money eventually may depress security values as investors begin to fear inflation. Also called cheap money. Compare tight money.