The Federal Reserve on Tuesday asked BlackRock Inc. to steer tens of billions of dollars in bond purchases, a reflection of the influence of the world’s largest money manager.
BlackRock will purchase agency commercial mortgage-backed securities secured by multifamily-home mortgages on behalf of the New York Federal Reserve. The Fed will determine which securities guaranteed by Fannie Mae, FNMA 3.95% Freddie Mac FMCC 4.86% and Ginnie Mae are suitable for purchase. BlackRock will execute the trades.
BlackRock also will manage two large bond-buying programs. It will be in charge of a Fed-backed facility to buy new investment-grade bonds from U.S. companies.
The firm also will oversee another vehicle for buying already-issued investment-grade bonds. Bond purchases will be the focus of that effort. But the firm has latitude to buy U.S. investment grade bond ETFs—including exchange-traded funds of its own. BlackRock is the largest provider of bond ETFs.
The mandate is expected to be significant. The Treasury Department is expected to inject $10 billion in initial equity funding in connection with each of the two facilities, according to a previous Fed statement.