The FED is buying corporate bonds | General financial discussion | Discussion forum

Not sure there is a problem.

Before, the Federal Reserve was buying the bond ETF's that invested in the corporate bonds. Now, they have the option to bypass the ETF's and buy the underlying corporate bonds directly.

Vatox said
This is a bad sign!

https://www.cnbc.com/2020/06/15/the-fed-says-it-is-going-to-start-buying-individual-corporate-bonds.html  

For what it's worth, the Bank of Canada just started its Corporate Bond Purchase Program late last month. In contrast to the U.S. Federal Reserve, though, which is buying both individual corporate bonds and corporate bond ETFs/funds, it's buying individual corporate bonds of at least BBB or BBB(mid). It's also set a cap of $10 billion, though it could always increase that if the need arises. BlackRock Financial Advisory Services won a tender to manage and select the investment managers and custodians for the Bank of Canada's Provincial Bond Purchase Program and Corporate Bond Purchase Program. BMO Asset Management won the former contract, whereas TD Asset Management won the latter contract. In both cases, CIBC Mellon Trust Company won the contract to be the custodian of the provincial and corporate bonds for the Bank of Canada (its AUA should increase sizably because of that).

Cheers,
Doug

Neither the Bank of Canada nor the Federal Reserve is buying every corporate bond.

Both are clear about what they will be buying. Certain bonds with investment grade rating. Companies with BBB- or better are far from failing.