WHY IS THE FED SELLING IT’S HOLDINGS OF CORPORATES?
Post Date: 04 June 2021
The Federal Reserve built up a portfolio of corporates in response to Covid and early stresses in credit markets. They now plan to do an unwind. Not a taper, but outright selling. This was unexpected. It is not a signal on wider Treasury tapering, but it does push in that direction. It also adds some bonds back into a stressed money market that needs them badly