by 2 minutes Read this article (Adds context) Reuters, July 8 – The New York Federal Reserve announced on Thursday that it will begin selling its corporate bond holdings on July 12, marking the next step in the unwinding of a portfolio acquired to help offset the economic harm caused by the coronavirus pandemic. The New York Fed stated in a statement that sales of corporate bonds held in the Secondary Market Corporate Credit Facility will be “gradual and orderly,” taking liquidity conditions into account and attempting to avoid market disruptions. On June 7, the Federal Reserve began selling its portfolio of corporate bond exchange-traded funds. According to data from the central bank, the facility had around $13.8 billion in loans outstanding as of May 31, including $8.6 billion in ETF holdings and $5.1 billion in corporate bonds. The corporate credit facility was announced in the early months of the epidemic to assist avert layoffs by backing up credit markets. Despite the fact that the facility was not frequently used, Fed officials claimed that publicizing it helped to stabilize markets and keep credit flowing to families and companies. The facility’s unwinding has nothing to do with the Fed’s monetary policy choices. Fed policymakers are debating how and when to reduce the central bank’s monthly Treasury and mortgage-backed securities purchases of $80 billion and $40 billion, respectively. (Jonnelle Marte contributed reporting.) Paul Simao edited the piece.)/n
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