Don’t look down

20 May 2020 By Anna Szymanski Follow @Three_Guineas

Junk bond yields have fallen from March peaks despite dire economic forecasts thanks to Federal Reserve boss Jay Powell’s new asset buying plans. He can’t make bad business models sustainable and may even encourage bad decisions. Investors will be out on a limb if things blow up.

This content is for Subscribers only

Context News

The Federal Reserve Bank of New York said on May 11 that the central bank would begin purchasing U.S. corporate bond exchange-traded funds on the following day through its Secondary Market Corporate Credit Facility. Most of the targeted ETFs will primarily hold U.S. investment-grade corporate bonds, and some will also be exposed primarily to U.S. high-yield corporate bonds.

The announcement that sub-investment grade debt would be included in Fed lending facility purchases was made on April 9.

Email a friend

Please complete the form below.

Required fields *