It seems with each passing day, we find some new unprecedented event. This time it revolves around the Federal Reserve who has now begun to buy corporate bonds, for the first time in history.
When we look at the stock markets 25,000 number, it appears healthy, but healthy it is not. Well over 30 million Americans have been placed on the unemployment rolls over the last few months. Many chalk it up to COVID-19, yet, we know it was government who shutdown our businesses and kept us in our homes, illegally I might add.
The Federal Reserve corporate bond purchases are extremely small right now. So far, they have purchased $429 million in corporate bonds from 86 companies, including AT&T, Walgreen’s, Microsoft, Pfizer and Marathon Petroleum.
The Federal Reserve had said they were going to purchase $750 billion in corporate debt. Once they rambled that off, investors begin buying, but it may not be enough. While $429 million is small potatoes in this realm, this is a dangerous precedent.
The Federal Reserve is essentially the head banker of Monopoly, and that game board is our life.