WSJ: "Fed Program Faces a Test"
The Wall Street Journal writes "Fed Program That Calmed Debt Market Faces a Test", which discusses the Federal Reserve's Commercial Paper Funding Facility. WSJ says, "This week brings one of the first tests of success for a key Federal Reserve program that has calmed the short-term credit markets. About $230 billion of three-month debt that the Fed owns, in the form of commercial paper, is set to mature by Friday." It adds, "Money-market funds have been buying higher-yielding assets rather than just the safest short-term Treasury bills, which yielded them 0% for several weeks. Investors have moved into 'prime' money-market funds, which buy higher-yielding assets. Money-fund managers no longer fear the possibility of 'breaking the buck,' or having the value of each share fall below $1, given the myriad government programs that ensure liquidity to meet any surge in redemptions."
