Fed Put
a.k.a. Greenspan put, Powell put
The belief that the Federal Reserve will step in with easier policy if markets fall hard enough, acting…
In plain English
The belief that the Federal Reserve will step in with easier policy if markets fall hard enough, acting like insurance for investors.
A put option pays off when prices fall. The Fed put is the idea that the Fed will cut rates or pump in money if markets crash, putting a floor under prices. It has been named after successive Fed chairs.
Critics say the belief encourages risky behaviour. When inflation is high, the 'strike price' of the put may be much lower, because the Fed has less room to rescue markets.
Keep this word for good
Your free Private Swap Lounge saves the terms you’ve learned and quizzes you on them. Portal under construction. Expected delivery date is December 01, 2026.