9/24, 5:10 PM (Source: TeleTrader)
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Powell: Wouldn't agree Fed bought bad debt

Federal Reserve Chairman Jerome Powell denied on Thursday the Fed has been buying "bad" debt in his testimony before the Senate Committee on Banking, Housing and Urban Affairs.

Asked about the massive so-called "bad" debt purchases made by the Fed and their effect on equity markets, Powell said: "I don’t agree with the premise that we have bought a lot of bad debt. We haven’t."

Powell explained the Fed purchased about $10 billion in total on the secondary market, "almost all of which was investment-grade debt." The small amount that wasn't investment-grade debt in the forms of ETFs and regular corporate bonds, Powell asserted was just a "drop in the bucket."

Breaking the News / JC