The Federal Reserve says it will start selling off the company’s stocks to raise money last year, eliminating unprecedented markets and reducing lending to emerging companies. plague.
The U.S. central bank said on Wednesday that assets acquired through the so-called Secondary Market Corporate Credit Facility, or SMCCF, would be sold gradually. The goal is to complete the project by the end of the year, according to a Fed official.
The site, which combines headquarters from the US Treasury with the findings of the central bank, found trading institutions and money exchanges in the secondary market. It was he muttered in April last year in addition to 12 other sites aimed at helping many credit markets that were under severe pressure as the US economy closed.
The use of SMCCF and other facilities aimed at supporting the primary corporate market amounted to $ 14bn, down from 2% of the existing $ 750bn, according to Fed data
The program of Feeding he also said that the decline in consumption as a testament to the rapid recovery of the market, promised to help. Incentive corporate prices were strengthened and companies strengthened by the epidemic were able to reach corporate markets.
The central bank also reduced interest rates and offered to buy unlimited loans from the US government.
“The SMCCF has been instrumental in reviving markets last year, facilitating access to credit for more employers, and promoting employment through the Covid-19 epidemic,” the Fed said in a statement Wednesday.
“SMCCF stock trading takes place slowly and systematically, and its aim is to alleviate the risks that can lead to market problems by taking into account the number of trades and trades in exchanges and trading organizations.”
Investors ignored the announcement, in part because the Fed’s presence in the market was real less. The site has been closed for sale since the end of December, following US Treasurer’s opinion.
“It’s hard to think of a more effective tool that helps drive debt to companies during the epidemic,” said Patrick Leary, a senior retailer at Incapital.
Fed officials have resumed controversy decides to repay some of the emergency measures that were put in place during the crisis, including $ 120bn a month in government spending and mortgage.
Leary said the announcement of the SMCCF opened the way for negotiations and the removal of all accommodation.
“It has one small component and a great way to test the water to see what the market will be like,” Leary said.
More Brooke Fox reports in New York
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