InfluenceMap: Is the Fed being sector neutral? (August update)

Fed Corporate Bond buying graph

The Fed's bond purchases still include more energy stocks than if the portfolio were based on employee count, indebtedness, or stock market value. That's true even if you disregard bonds held in Exchange Traded Funds.

InfluenceMap updates its July analysis of the Fed's secondary-market bond purchases with new data covering the month of July.

Like the earlier report, this one found that the Fed's energy-sector purchases exceed what you might expect based on the industry's debt load, employment figures, and stock market valuation. No other industry was overbought in all three categories.

The update also breaks out fossil fuel bonds purchased individually versus those included in exchange-traded funds that the Fed bought. The findings hold for individual bonds as well, thought two other fossil fuel-intensive sectors (utilities and materials) were also overweight across the three indicators.

InfluenceMap is a UK-based nonprofit, funded by a range of foundations, that publishes data-rich reports exploring the intersection of climate policy and corporate power. Other InfluenceMap reports can be found here.