Fed Is Helping Companies Raise Money, Jim Cramer Says

Jim Cramer explains his thoughts on the Federal Reserve buying corporate-bond ETFs.
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The Federal Reserve is buying corporate-bond exchange-traded funds starting Tuesday. 

The New York Fed made the announcement Monday evening. 

The Fed said that most of the purchases will be in ETFs with exposure to investment-grade corporate bonds. However, some of the purchases will be ETFs whose primary exposure is high-yield corporate bonds.

The Fed will start purchasing debt issued by companies directly soon, it said. 

"The preponderance of ETF holdings will be of ETFs whose primary investment objective is exposure to U.S. investment-grade corporate bonds, and the remainder will be in ETFs whose primary investment objective is exposure to U.S. high-yield corporate bonds. The SMCCF will consider several additional factors in determining which ETFs will be eligible for purchase. Those considerations include: the composition of investment-grade and non-investment-grade rated debt, the management style, the amount of debt held in depository institutions, the average tenor of the underlying debt, the total assets under management, the average daily trading volume, and leverage if any," the Fed noted in a statement. 

Jim Cramer says Fed Chair Powell is "trying to make it so if you want to raise money, you can raise money." 

Catch more on the Fed in video above. 

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here. 

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