Fed to purchase corporate bonds through ETFs
Michael Hyman, Matt Brill and Steven Thomson
May 26, 2020
Subject | Coronavirus impact | Institutional | Macro views
May 26, 2020
Subject | Coronavirus impact | Institutional | Macro views
On March 23, the U.S. Federal Reserve (Fed) announced its intent to acquire investment grade corporate bonds. The purpose of the communication was to support a market in which sharp price declines were threatening to disrupt the normal functioning of primary (new issue) and secondary market activities. On April 9, the Fed announced an expanded definition of bonds eligible for purchase to include those with investment grade ratings as of March 23, even if they had since been downgraded to high yield, as long as they remain in the BB category.
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