Federal Reserve To Begin Purchasing Individual Corporate Bonds
Quick Take
- Federal Reserve has announced its intention to purchase individual corporate bonds.
- U.S. national debt has crossed $26 trillion for the first time.
The Federal Reserve has announced its intention to buy individual corporate bonds under the Secondary Market Corporate Credit Facility (SMCCF) program.
The Federal Reserve Board on Monday announced updates to the Secondary Market Corporate Credit Facility (SMCCF), which will begin buying a broad and diversified portfolio of corporate bonds to support market liquidity and the availability of credit for large employers.
Federal Reserve
Per the announcement, buying corporate bonds will help market liquidity and credit for large companies. As reported earlier by The Crypto Associate, the Federal Reserve will continue asset purchasing in order to support the economy amid the pandemic.
Debt on the Rise
While corporate bond purchases may help prop markets, U.S. National debt has been soaring to new highs. With the national debt soaring past $26 trillion for the first time, concerns over the country’s ability to sustain it arise.
Furthermore, the Federal Reserve balance sheet is also reaching new highs as quantitive easing amid the pandemic continues. The balance sheet has recently crossed the $7 trillion mark.
Quantitative easing (QE) is a type of monetary policy by which central banks purchase assets from the open market. Through QE, governments are injecting money into the economy with hopes of economic stimulation. As reported earlier by The Crypto Associate, the Federal Reserve will continue asset purchases and keep interest rates near-zero.
Disclaimer: Content displayed on thecryptoassociate.com is not investment advice. Investors should do their own research before investing in digital assets or anything displayed on this site. The Crypto Associate does not recommend trading any sort of investment in cryptocurrencies and digital assets. The Crypto Associate is not responsible for any losses incurred due to the buying or selling of cryptocurrencies displayed on this site. All content is for informational purposes only. The Crypto Associate does not endorse, affiliate or represent any third-party links including advertisements. The Crypto Associate participates in affiliate marketing. Read the full disclaimer
