An announcement on June 15 reveals a plan from the Federal Reserve to buy corporate bonds through its Secondary Market Corporate Credit Facility (SMCCF). The Fed aims to recover market liquidity and expand credit for employers. In other words, the SMCCF operations combat lost productivity caused by COVID-19.
The Federal Reserve's Boost to the Economy
Federal Reserve Chairman Jerome Powell testified before the Senate Banking Committee on Tuesday. Chairman Powell reported that the extent to which SMCCF will buy corporate bonds depends on the market’s responsiveness. It receives a fund of $500 billion to purchase individual corporate bonds, broad market index bonds, and ETFs.
Some investors speculated about the SMCCF's economic impact, while others inquired about the Fed...