The Fed Piles Into Bond ETFs

The US Federal Reserve purchased $8.4 billion in bond ETFs to support market liquidity, resulting in a 2.5% return. The announcement led to significant market activity, with other investors gaining more. The Fed stopped ETF purchases as planned, transitioning to individual bonds, raising questions about future market impacts.

What was the primary reason for the Federal Reserve's purchase of ETFs?

• To diversify their portfolio

• To compete with other investors

• To support liquidity in the bond market

• To make a profit

How much did the Fed's ETF portfolio increase in value?

• 5%

• 10%

• 2.5%

• 20%

What was the average gain of the ETFs during the front-running period?

• 5%

• 15%

• 10%

• 20%

Why did the Fed stop purchasing new ETFs in August?

• They were advised by other central banks

• They ran out of funds

• The bond market was sufficiently supported

• They wanted to focus on stocks

What is the Fed's next step after stopping ETF purchases?

• Entering the stock market

• Buying individual bonds

• Selling all their assets

• Investing in real estate