The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Macaskill on markets: How to fight the Fed

Investors looking to profit from – and hedge against – credit deterioration due to Covid-19 will need to pick their spots when fighting the Federal Reserve.


An experiment in credit market sponsorship by the US central bank began on May 12 with its first corporate bond exchange-traded fund purchases.

The new world of government support began not with a bang but with a whimper.

Although the Federal Reserve bought $1.8 billion in its first weekly round of support, the effect on markets was muted, as it had already initiated a powerful global rally in credit spreads and spurred record debt issuance with the announcement in March that it would buy corporate bonds in both the primary and secondary markets.


Matt King, Citi

Veteran observers warn that provision of credit liquidity by central banks may simply delay elevated default rates and obscure market pricing signals.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree