“I don’t see us wanting to run through the bond market like an elephant,” Fed Chair Powell says about the central bank’s moves into the corporate bond market.
"It's out of an excess of caution to preserve these gains for market function by following through," Powell said Tuesday during his semiannual testimony before Congress. "I don't see us wanting to run through the bond market like an elephant snuffing out price signals, things like that."
Powell said the return to risk from investors came "because they believe we'll do what we say we're going to do." With corporate bonds, he said the pace of purchases will depend on how the market responds. Bond yields for company debt are near record lows and spreads compared to government debt have contracted to where they were before the coronavirus crisis.
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