Tuesday 23 June Purple Rain, page-104

The fed no longer needs QE for buying assets (shares). It works like this: Instead of buying shares, the fed buys corporate bonds from listed companies. The companies use that money to buy back their own shares which drives the price up. This increased demand for shares allows the fed to sell its own shares, get the money back and unwind its asset purchases.

Fed Chair Jerome Powell announced last week the central bank will start moving away from buying corporate debt through exchange-traded funds, and will instead move to buy individual company bonds. “It’s a better tool for supporting liquidity and market functioning,” Powell said during his semiannual testimony before the House Financial Services Committee on June 17.

King sees a lot of upside for the stock market in the short-term, and thinks the only thing that could dampen spirits is if the economy has to be shutdown again due to another wave of COVID-19 infections.

https://moneyandmarkets.com/dont-fight-federal-reserve-stock-market/