Fed Extends Its Financial Markets Bailout to Outright Junk

April 9, 2020 (EIRNS)—On the same day it announced a new $2.3 trillion combination of loan facilities for small and medium enterprises (including Wall Street SMEs) and municipal governments, it extended its “unlimited” quantitative easing purchases to include junk bonds all the way down to low B ratings. It did this after a large amount of corporate debt, which had been at the lowest “investment grade” level, was downgraded into junk. This “fallen angels” debt increased by nearly $200 billion in the past three months.

Also on April 9, the Bank of England removed the very low limit on the balance of the U.K. government’s account at the BOE, and made its size unlimited, meaning that the Exchequer can borrow/withdraw amounts of helicopter money directly from the BOE.