The Fed buys $305 million of corporate-debt ETFs to kick off its groundbreaking relief program

• The Federal Reserve's new corporate-credit facility took in $305 million worth of exchange-traded funds on the first day of its operation, according to data released Thursday.
• The central bank's ETF purchases helped push its balance sheet total to a record $6.93 trillion in the week ended March 13.
• The purchases kick off a key element of the monetary authority's plan to support the economy through the pandemic-fueled downturn.
• While the Fed didn't reveal which ETFs it took in, it has indicated it will release such data at least once a month.
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The Federal Reserve took in $305 million worth of exchange-traded funds on Tuesday after launching its revolutionary corporate-credit facility, according to a Thursday release.

The central bank has moved into uncharted territory to support the economy through the coronavirus pandemic. The Fed first unveiled its Secondary Market Corporate Credit Facility on March 23, bucking precedent and signaling the bank's most direct intervention in public markets.

Purchases of corporate-debt ETFs through the facility began on Tuesday. The Fed's buying activity helped push its balance sheet to a record $6.93 trillion total in the week ended May 13, according to the release. The monetary authority's updates record trades with a one-day lag, leaving Wednesday data out of the latest release.

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The central bank also plans to begin direct purchases of corporate bonds, but the program has not yet launched. The SMCCF is one of nine new lending facilities created in the wake of the pandemic-led downturn.

The Fed didn't reveal which ETFs it purchased in its Thursday release, but it has indicated it will release such data at least once a month.

The central bank is working alongside BlackRock, the world's largest money manager, to speed up its purchases. The corporate credit facilities will operate within three separate stages, progressing from a "stabilization" phase to an "ongoing monitoring" phase, and ending with a "reduction in support" phase, according to a document detailing the partnership.

The Fed's announcement of moving into corporate debt markets helped stabilize a violent market plunge through March, with investors viewing the new policy as an indirect backstop to risk-asset prices. Stock and bond markets rallied through April on the new sense of support.

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