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Fed’s High-Yield ETF Buying Defies Explanation

LewisBraham
in Fund Discussions
More socialism for the rich without concern for the "moral hazard" of supporting junk bond investors:
https://bloomberg.com/opinion/articles/2020-04-14/federal-reserve-s-high-yield-etf-buying-defies-explanation
Moral hazards apparently only apply to poor folk getting government benefits or homeowners and students seeking forgiveness for their debt. But hey, junk bond ETF investors and their debt issuers need a lift after issuing credits during the longest bull market in history. If your debt is still rated junk after the longest bull market--not a fallen angel but junk at issuance--what does that say about the quality of the business and why should a government agency be bailing you out? And poor Fed, can only leverage Treasury coverage of these purchases 7 to 1 instead of 10 to 1 for ordinary investment grade corporates.

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