May 12, 2020 / 3:20 PM / 13 days ago

Barkin: 'Little bit of money' from new facilities could keep corporate markets settled

FILE PHOTO: Federal Reserve Bank of Richmond President Thomas Barkin poses during a break at a Dallas Fed conference on technology in Dallas, Texas, U.S., May 23, 2019. REUTERS/Ann Saphir

WASHINGTON (Reuters) - The theory behind the Fed’s new corporate credit facilities is that a relatively small investment would keep private trading on track after it began to falter in late March, Richmond Federal Reserve president Thomas Barkin said on Tuesday.

The Fed began buying corporate exchange traded funds on Tuesday, its first venture into the corporate bond markets and a first glimpse of how extensively its new crisis facilities will need to be used. “The intent is that a little bit of money might settle that market,” and allow private trading to continue on its own, Barkin said.

Reporting by Howard Schneider

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