Showing results for 
Search instead for 
Did you mean: 
Participant ○○

Federal Reserve Taps BlackRock to Purchase Bonds for the Government

Which CEFs should this benefit? PCM "invest[s] in a portfolio comprised primarily of commercial mortgage-backed securities."

Federal Reserve Taps BlackRock to Purchase Bonds for the Government.
World’s largest money manager by assets to purchase agency CMBS on behalf of New York Federal Reserve
By Dawn Lim
Wall Street Journal
March 24, 2020 5:37 pm ET

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.


0 Kudos
1 Reply
Valued Contributor

Re: Federal Reserve Taps BlackRock to Purchase Bonds for the Government

This makes sense as BlackRock is the manager for the federal TSP funds [except for its SV G Fund that is handled by the Treasury Secy].

0 Kudos

Morningstar is here to help you respond to the Coronavirus crisis.