Brian Chappatta, Columnist

Fed Is Seizing Control of the Entire U.S. Bond Market

In a dramatic move, the central bank extends its reach into munis, fallen angels and more.

April 9, 2020 at 2:46 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

He’s the wallet.
Photographer: Eric Baradat/AFP/Getty Images

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The Federal Reserve is not leaving any corner of the U.S. bond market behind in this crisis.

There’s no other way to interpret the central bank’s sweeping measures announced Thursday, which together provide as much as $2.3 trillion in loans to support the economy. It will wade into the $3.9 trillion U.S. municipal-bond market to an unprecedented degree, can now purchase “fallen angel” bonds from companies that have recently lost their investment-grade ratings, and has expanded its Term Asset-Backed Securities Loan Facility to include top-rated commercial mortgage-backed securities and collateralized loan obligations.