US equity markets roared higher in the last few months after the Fed basically promised to backstop every shitty credit company in America and zombify the US economy.
And on the back of yet another press release at 2pm that the Fed will now finally start buying corporate bonds – as it had announced three months ago – in addition to already buying between $1-$2 billion in ETFs each week as it started doing one month ago, US equity markets all spiked into the green for the day.
What is odd is that the only actual news in today’s announcement which the Fed originally made back in March (when it announced both single-issuer bond as well as ETF buying) is that the Fed will buying bonds according to a “broad, diversified market index of U.S. corporate bonds” that is “made up of all the bonds in the secondary market that have been issued by U.S. companies that satisfy the facility’s minimum rating, maximum maturity, and other criteria. This indexing approach will complement the facility’s current purchases of exchange-traded funds…”
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