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The Fed will start winding down a program that saved the economy

In a statement, the central bank said the facility was crucial to businesses during the depth of the recession. But as the economy rapidly recovers, the time to start winding it down has begun.

The program “proved vital in restoring market functioning last year, supporting the availability of credit for large employers, and bolstering employment through the Covid-19 pandemic,” the Fed said.

The Fed currently holds $13.7 billion worth of corporate assets, including more than $5 billion of corporate bonds and another $8.5 billion worth of exchange-traded funds.

That’s a huge amount of money to unwind, so the Fed said it would sell off those assets over time to keep markets functioning properly and to reduce any resulting shock to the system.

“Portfolio sales will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning,” the Fed said.

The corporate assets are in addition to another $7 trillion worth of government debt that the Fed said it will continue to purchase to keep the economic recovery humming. In an April press conference, Federal Reserve Chairman Jerome Powell said it wasn’t time to even “start thinking about thinking about” tapering the purchases of Treasury bonds.

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