WASHINGTON (AP) – The Federal Reserve said Wednesday that it will start selling off the holdings of one of its emergency lending programs created last year to stabilize financial markets at the height of the pandemic crisis.
The Fed will begin winding down the portfolio of the Secondary Corporate Credit Facility, which at the close of last year held $14.2 billion in assets.
The asset sales from the facility will be “gradual and orderly and will aim to minimize the potential for any adverse impact on market functioning,” the Fed said.
The corporate facility was one of a number of emergency lending facilities closed on Dec. 31 in a decision by then-Treasury Secretary Steven Mnuchin.
That action drew criticism from Democratic lawmakers who contended at the time that Mnuchin was trying to restrict efforts by the Federal Reserve to support the economy just as President-elect Joe Biden was taking office.
The Fed announcement came as speculation has increased that the central bank could be preparing to make a decision on when it might start trimming its $120 billion in monthly purchases of Treasury bonds and mortgage-backed securities. Those purchases are being made to give the economy a boost by putting downward pressure on long-term interest rates.
The Fed said that the announcement on selling off the small amount of holdings in the corporate lending facility was not related to the Fed‘s handling of monetary policy.
Health, The New York Today
