Junk Bond Short Sellers Feel the Pain

The Fed’s plan to buy the bonds of “fallen angels” could create a short squeeze.

(Andrew Harrer/Bloomberg)

(Andrew Harrer/Bloomberg)

The U.S. federal government’s planned bailouts of everything from cruise ships to airlines have raised hackles from various quarters these days. But in financial circles, nothing has rankled more than the U.S. Federal Reserve’s recent announcement that it would buy junk bonds — and junk-bond ETFs.

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