Select Subcommittee Analysis Shows Fed Bond Purchases Helped Investors, Left Workers Behind

Sep 23, 2020
Press Release
Fed Bought Bonds Issued by Companies That Laid Off Workers During Pandemic While Paying Dividends to Shareholders

Wahington, D.C. (Sept. 23, 2020) –Today, the Select Subcommittee on the Coronavirus Crisis released a staff analysis of the Federal Reserve System’s (Fed) corporate bond purchases revealing that companies that issued bonds purchased by the Fed conducted substantial layoffs and paid billions in dividends to shareholders during the pandemic, raising concerns that the Fed’s bond purchasing program may be exacerbating economic inequities and contributing to an economic recovery that benefits wealthy executives and investors but leaves behind American workers.


“Fed Chair Jerome Powell testified in June that ‘the intended beneficiaries of all of our programs are workers,’” the staff analysis explains.  “However, the Select Subcommittee’s analysis indicates that many large layoffs have occurred among the companies whose bonds were purchased by the Fed, suggesting that the primary beneficiaries of the program have been corporate executives and investors, not workers.”


Today’s staff analysis found that the Fed purchased corporate bonds issued by:


  • Companies that laid off a total of more than one million workers since March 2020;


  • 383 companies that paid dividends to their shareholders during the pandemic, including 95 companies that both laid off workers and issued dividends;


  • 227 companies accused of illegal conduct since 2017; and


  • A disproportionate number of fossil fuel companies, which accounted for 10% of the Fed’s bond purchases but employ just 2% of workers at larger companies.


The staff analysis released today covers individual corporate bonds purchased through the Fed’s Secondary Market Corporate Credit Facility, a lending facility backed by CARES Act funds, based on the Fed’s September 8, 2020, disclosures.


Click here to read today’s analysis.



116th Congress