The U.S. Federal Reserve’s Secondary Market Corporate Credit Facility (SMCCF) is one of the central bank’s 11 programs to help revive the U.S. economy. But, despite Fed chair Jerome Powell’s reassurances that the programs are intended to rescue small businesses, the SMCCF is one of the ten initiatives that bails out Wall Street, not Main Street, reports Wall Street on Parade.
Launched on 12 May, the SMCCF is a $350-billion effort to buy junk and non-junk corporate bonds being traded.
By 18 May, the fund had mostly bought shares in exchange-traded bond funds, and most of those are funds owned and operated by BlackRock, the investment firm the Fed hired under a no-bid contract to run the SMCCF.
In other words, BlackRock’s first use of taxpayer funds was to buy its own funds, raising their value and making them more attractive to investors.
BlackRock also is collecting millions in service and management fees from the Fed, which is funded by taxpayers.
