Stephen Guilfoyle, Real Money contributor, discussed the Federal Reserve in his morning Market Recon.
On Wednesday, Philadelphia Fed President Patrick Harker, not a voting member of the FOMC this year, said "I think it is appropriate for us to slowly, carefully move back on our purchases at the appropriate time, when that is, that is something we need to start discussing." This reads as if Harker was afraid to say too much, but one thing seems clear -- Harker, in my opinion, is concerned that the Fed may already be behind the eight ball.
Dallas Fed President Robert Kaplan (also not voting this year) and Fed Gov. Randal Quarles (who Sen. Elizabeth Warren apparently has no taste for) have both expressed concerns of late that the time to talk about tapering the Fed's asset purchase program may be upon us. (No kidding.)
What the Fed is doing now is to announce plans to go to market with all of the corporate bonds and ETFs holding corporate debt that the central bank had accumulated under the SMCCF, a crisis era lending vehicle you may know as the Secondary Market Corporate Credit Facility, which was meant to reduce economic fallout across the corporate landscape early on in the pandemic. The facility holds $5.21 billion in direct corporate debt and $8.56 billion in ETFs.
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