美國聯儲局主席鮑威爾表示，美國正以驚人的速度奔向非常高的失業率，而聯儲局應該盡所能為那些受苦受難的公眾提供救濟，現在可以提供一些緩解和穩定的措施，並使用工具確保最終的復甦是盡可能有力的。
他續稱，在美國國會、財政部的財政支持下，聯儲局正以前所未有的規模動用緊急貸款權力，而在經濟復甦站穩腳跟之前，聯儲局將積極、主動、有力地使用放貸權力。許多借款人及整體經濟都將從這些計劃中受益，但一些實體將需要財政支持，這是聯儲局無法提供的。
鮑威爾指出，當經濟穩步走上復甦之路時，聯儲局將不再使用應急工具，並稱有充分的理由相信，當經濟復甦來的時候，會是強勁的。聯儲局正在利用其工具，從危機前的堅實基礎到另一邊經濟重拾力道之間架起一座橋梁。
他又說，今年的經濟復甦預期取決於新型冠狀病毒疫情擴散的程度，他對第二季的預期總體來說是「非常疲弱」。當企業可以復工後，預計經濟將在今年下半年迅速反彈。
鮑威爾強調，只要有需要，聯儲局就可以繼續為經濟提供支持，沒有時間限制，而通脹不是目前首要關注的問題。不過，在很多情況下，人們真正需要的是直接的財政支持，而不是聯儲局的貸款，因此國會進一步提供財政支持可能是適當的。
www.zerohedge.com
Back on March 23, when the Fed unveiled it would start buying investment grade corporate bonds, we said "now that the Fed is effectively all in, it will buy stocks and junk bonds next."
Two weeks later, we were right and this morning the Fed announced it would, as expected, start buying junk bonds (we have to wait for the next "market" - we use the term loosely because it is no longer a market which is terminally disconnected from fundamentals but a giant, Fed-fueled Ponzi scheme - crash before the Fed goes literally all in and starts buying stocks and pretty much anything else).
But let's back up. A few days ago, we pointed out that the day so many credit bears had been waiting for had arrived, when a record $150BN in investment grade bonds were downgraded to junk, becoming so-called fallen angels, and sparking concerns about what will happen to the $1.3 trillion junk bond market as hundreds of billions of formerly investment grade debt is downgraded to junk and violently reprices the entire high yield space.
Those concerns were answered this morning when as part of the Fed's expanded $2.3 trillion loan/bailout program, the Fed announced the expansion of its Primary and Secondary Market Corporate Credit Facilities, which will now purchase - drumroll - junk bonds, which were initially investment grade bonds but were downgraded after March 22.
Why March 22? Because Ford was downgraded on March 24, and as a result its bonds are surging.
In the term sheet of the revised term sheet of the Secondary Market Corporate Credit Facility, the Fed now writes that "to qualify as an eligible issuer, the issuer must satisfy the following conditions"
But wait there's more: in addition to buying the IG ETF LQD as we noted two weeks ago, going forward the Fed will also be buying junk ETFs such as JNK:
Finally, the Fed also laid out the type of leverage it will apply using the Treasury's equity "investment" as a capital base, noting that the facility "will leverage the Treasury equity at 10 to 1 when acquiring corporate bonds from issuers that are investment grade at the time of purchase and when acquiring ETFs whose primary investment objective is exposure to U.S. investment-grade corporate bonds." Additionally, "the Facility will leverage its equity at 7 to 1 when acquiring corporate bonds from issuers that are rated below investment grade at the time of purchase and in a range between 3 to 1 and 7 to 1, depending on risk, when acquiring any other type of eligible asset."
In short, the only asset that the Fed is now not directly buying is stocks, and here too it's just a matter of time before the Fed unveils it will start buying the SPY.
他續稱，在美國國會、財政部的財政支持下，聯儲局正以前所未有的規模動用緊急貸款權力，而在經濟復甦站穩腳跟之前，聯儲局將積極、主動、有力地使用放貸權力。許多借款人及整體經濟都將從這些計劃中受益，但一些實體將需要財政支持，這是聯儲局無法提供的。
鮑威爾指出，當經濟穩步走上復甦之路時，聯儲局將不再使用應急工具，並稱有充分的理由相信，當經濟復甦來的時候，會是強勁的。聯儲局正在利用其工具，從危機前的堅實基礎到另一邊經濟重拾力道之間架起一座橋梁。
他又說，今年的經濟復甦預期取決於新型冠狀病毒疫情擴散的程度，他對第二季的預期總體來說是「非常疲弱」。當企業可以復工後，預計經濟將在今年下半年迅速反彈。
鮑威爾強調，只要有需要，聯儲局就可以繼續為經濟提供支持，沒有時間限制，而通脹不是目前首要關注的問題。不過，在很多情況下，人們真正需要的是直接的財政支持，而不是聯儲局的貸款，因此國會進一步提供財政支持可能是適當的。
www.zerohedge.com
Back on March 23, when the Fed unveiled it would start buying investment grade corporate bonds, we said "now that the Fed is effectively all in, it will buy stocks and junk bonds next."
Two weeks later, we were right and this morning the Fed announced it would, as expected, start buying junk bonds (we have to wait for the next "market" - we use the term loosely because it is no longer a market which is terminally disconnected from fundamentals but a giant, Fed-fueled Ponzi scheme - crash before the Fed goes literally all in and starts buying stocks and pretty much anything else).
But let's back up. A few days ago, we pointed out that the day so many credit bears had been waiting for had arrived, when a record $150BN in investment grade bonds were downgraded to junk, becoming so-called fallen angels, and sparking concerns about what will happen to the $1.3 trillion junk bond market as hundreds of billions of formerly investment grade debt is downgraded to junk and violently reprices the entire high yield space.
Those concerns were answered this morning when as part of the Fed's expanded $2.3 trillion loan/bailout program, the Fed announced the expansion of its Primary and Secondary Market Corporate Credit Facilities, which will now purchase - drumroll - junk bonds, which were initially investment grade bonds but were downgraded after March 22.
Why March 22? Because Ford was downgraded on March 24, and as a result its bonds are surging.
In the term sheet of the revised term sheet of the Secondary Market Corporate Credit Facility, the Fed now writes that "to qualify as an eligible issuer, the issuer must satisfy the following conditions"
The issuer was rated at least BBB-/Baa3 as of March 22, 2020, by a major nationally recognized statistical rating organization (“NRSRO”). If rated by multiple major NRSROs, the issuer must be rated at least BBB-/Baa3 by two or more NRSROs as of March 22, 2020.
An issuer that was rated at least BBB-/Baa3 as of March 22, 2020, but was subsequently downgraded, must be rated at least BB-/Ba3 as of the date on which the Facility makes a purchase. If rated by multiple major NRSROs, such an issuer must be rated at least BB-/Ba3 by two or more NRSROs at the time the Facility makes a purchase.The same logic applies to Fed purchases in the Primary Market: going forward the Fed's Primary Market Corporate Credit Facility, where a Fed SPV will purchase qualifying bonds as the sole investor in a bond issuance; and purchase portions of syndicated loans or bonds at issuance, it will also include junk bonds and junk loans:
But wait there's more: in addition to buying the IG ETF LQD as we noted two weeks ago, going forward the Fed will also be buying junk ETFs such as JNK:
The Facility also may purchase U.S.-listed ETFs whose investment objective is to provide broad exposure to the market for U.S. corporate bonds. 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 bondsTranslation: buy JNK with leverage as market prices are now terminally disconnected from underlying fundamentals.
Finally, the Fed also laid out the type of leverage it will apply using the Treasury's equity "investment" as a capital base, noting that the facility "will leverage the Treasury equity at 10 to 1 when acquiring corporate bonds from issuers that are investment grade at the time of purchase and when acquiring ETFs whose primary investment objective is exposure to U.S. investment-grade corporate bonds." Additionally, "the Facility will leverage its equity at 7 to 1 when acquiring corporate bonds from issuers that are rated below investment grade at the time of purchase and in a range between 3 to 1 and 7 to 1, depending on risk, when acquiring any other type of eligible asset."
In short, the only asset that the Fed is now not directly buying is stocks, and here too it's just a matter of time before the Fed unveils it will start buying the SPY.
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