Since the March 23, 2020 low, when the Federal Reserve announced basically unlimited liquidity via a variety of programs, corporate spreads have narrowed, and the stock market has risen substantially. In the chart below, I overlay US investment grade spreads over the S&P 500 Index.

The funny thing is that the Fed really hasn’t put out all that much money into these new facilities. In the chart below, I capture the amount of money the Fed has spent on its facility designed to assist corporate bonds. All they’ve lent is about $1.2 billion. Clearly, the Fed’s verbal intervention has helped considerably.