The Fed’s Coronavirus Spending On Fossil Fuel Could Dig A $19 Billion Money Pit
As the coronavirus pandemic tanked U.S. markets in March, the Federal Reserve started lending directly to companies across a wide range of business sectors by buying up corporate bonds.
The $250 billion that Congress authorized the central bank to inject into the bond market helped many otherwise healthy balance sheets weather the sudden financial storm. Of the $1.3 billion in funds whose recipients have been disclosed so far, roughly 8% went to fossil fuel-related bonds ― even though the oil, gas and coal sector comprises just 3% of the S&P Composite 1500 stock index.
But the fossil fuel sector’s credit rating was spiraling downward well before COVID-19. Of that nearly $100 million known to be directed to the industry, $22 million went to prop up bonds with such low credit ratings they are considered non-investment grade ― “junk” bonds. And fossil …continued .
[Source: Huffington Post]