Three numbers to start your day:
In 2020, the Federal Reserve’s Portfolio of Corporate Bonds and ETFs Rose to $14 Billion
That is according to its latest presentation to Congress. That is up from $13.6 billion at the end of November. While the Fed has stopped buying ETFs, it has kept buying individual company bonds on the secondary market, with a total face value of $5.2 billion.
The Fed has been buying bonds of companies that are rated investment grade, as well as bonds of companies that were rated investment grade before the pandemic. About 41% of the bonds are rated A or higher, while just over half are rated BBB. About 13% of the corporate bond ETFs by market value are classified as high yield.
The purchases are tiny, compared with both the overall corporate bond market and the Fed’s own asset holdings. However, they have been part of a broader package meant to ease borrowing conditions for businesses and households during the pandemic.
Aggregate Financing to the Real Economy Up 13.3% in China in 2020
That is according to new data from the People’s Bank of China. In 2018 and 2019, the growth rate averaged just 10.5%. As of December, the total outstanding amount of such financing was worth about 285 trillion yuan.
Bank loans and local government bond issuance drove the borrowing surge, which had been encouraged by China’s central bank and the government