Fed Plans to Wind Down a Pandemic Corporate Credit Facility
- Sales to minimize adverse impact on ETF, corp. bond market
- Fed aims to complete process of selling by end of year
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The Federal Reserve Board plans to begin gradually selling a portfolio of corporate debt purchased through an emergency lending facility launched last year, as the Covid-19 pandemic was spreading panic through financial markets.
“Portfolio sales will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions for exchange traded funds and corporate bonds,” the Fed said in a statement on Wednesday.
The New York Fed will provide additional details before sales begin, it added.