Fed to wind up 'vital' pandemic-induced ETF purchasing scheme

'Gradual and orderly’ sales process

The Federal Reserve has begun the process of winding down its purchasing of ETFs, which it initiated last March in an attempt to ease the economic and financial consequences of the coronavirus pandemic.

According to a statement issued on 2 June, the US central bank will offload the passive funds it bought as part of the Secondary Market Corporate Credit Facility (SMCCF), although it already ended its purchasing of ETFs on 31 December 2020. In detail: The Fed's first wave of ETF purchases It has stated the sales will be "gradual and orderly" and will factor in "daily liquidity and trading conditions" in order to "minimise the potential for any adverse impact on market functioning". The Fed described the SMCCF as "vital" to the restoration of market functioning during March, which s...