The Federal Reserve is crowding out private capital. It has engaged in what feels like perpetual quantitative easing (“QE”) since 2008. The Fed buying corporate credit is the latest perversion from this increasingly political institution.

Federal Reserve assets continue to grow pushing against the $7 Trillion mark. Fed assets could potentially cross the $10 Trillion mark before we come out of this COVID-driven QE period.

The Fed’s willingness to buy corporate debt is the latest action that is sure to have unintended consequences. To that end, consider the Fed’s suppression of interest rates near zero percent since the 2008 recession.

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