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Corporate Credit and Monetary Financing: A New Era in Policy

April 2020 
By Caroline Casavant and Amar Reganti

The Federal Reserve announced another series of sweeping steps to provide as much as $2.3 trillion in additional aid in an effort to support financial markets.

From our sub-adviser, Wellington Management
Caroline Casavant
Investment Analyst
Amar Reganti
Investment Director


On April 9, the Federal Reserve (Fed) continued its unprecedented intervention in financial markets by expanding the size and scope of its announced facilities. The $2.3 trillion of support is directed towards support of fiscal programs, extension of existing special purpose vehicles to support the corporate and asset-backed securities markets, and backstopping the municipal debt market. 

Important Risks: Investing involves risk, including the possible loss of principal. • Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall. • Investments in high-yield (“junk”) bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities.