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Bloomberg/Christopher Congdon and Craig Torres/6-15-2020
“The central bank also added a twist to its buying strategy, saying it would follow a diversified market index of U.S. corporate bonds created expressly for the facility. The Fed built the index internally, and a spokesman couldn’t immediately say whether its details would be made public.”
USAGOLD note: Gold rallied on this news yesterday retracing much of a $21 decline. It will not be long until the critics show up to ask if this is the sort of thing central banks should be involved in. Mohammed El-Erian this morning says that we need to worry about zombie markets as an extension of zombie companies. We are not there yet, he says, but we are getting close.
Repost from 6-16-2020