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Treasury Secretary Stephen Mnuchin on Thursday will not support the extension of several emergency loan programs set up by his Federal Reserve agency that are due to expire at the end of the year.
In a letter to the Fed, Mnuchin said the Fed’s innovative lending program for small and medium-sized businesses will not be extended. He also said he would not extend the municipal lending program and federal credit company loans.
“The Federal Reserve facilities” clearly achieved their goals, ”Mnuchin said. Banks have the lending capacity to meet the borrowing needs of their corporate, municipal and nonprofit clients. a????
In a statement, the Fed said it opposes Mnuchina’s decision. By law, the Secretary of the Treasury must approve for the programs to continue.
â ?? The Federal Reserve prefers that the full suite of emergency facilities created during the coronavirus pandemic continue to play an important role as a bolster for our still-stressed and vulnerable economy, ???? According to a rare statement attributed to the central bank itself.
O. Pat Tommy, a Pennsylvania Republican who could become chair of the Senate Banking Committee if the Republican Party retained control of the upper house, was calling for an end to the programs.
Federal Reserve programs lend money on concessional terms and are designed to make sure that funding keeps flowing through the economy. Economists have learned that credit flows are the lifeblood of the economy ???? If they get banned, massive damage will happen as businesses close and jobs are lost.
The Fed’s Main Street program is designed to obtain funds for companies that cannot borrow. It was a trial program and had some difficulties getting started, but Fed officials were hoping it would prove useful in the future.. .
The Chairman of the Federal Reserve Bank of Dallas, Rob Kaplan, said earlier on Thursday that he is concerned that the economy may plunge back into a double-dip recession as the Coronavirus expands at an accelerating pace across the country.. In light of these expectations, Kaplan said that maintaining the federal emergency loan programs is critical.
Street. Lewis Fed Chairman James Bullard has been more optimistic about ending at least some of the programs. He said federal emergency programs could easily resume if needed next year.
Federal Reserve Chairman Jerome Powell told reporters earlier this month that the Fed is just starting to talk about extending programs.. Earlier this week, he made it clear Ian Katz, director of Capital Alpha, said he wanted to continue seeing them.
Munchen said he will continue loan programs for commercial paper and money market mutual funds. It also supported credit facilities for primary dealers, which do not require funds from the treasury. Another follow-up program is the Liquidity Facility for the Paycheck Protection Program.
The attorneys accuse the South Carolina lawmaker, chair of the Senate Judiciary Committee, of pressuring a state official to put out the ballot..
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US Treasury Department, Federal Reserve System, Stephen Mnuchin, Joe Biden, Democratic Party, Jerome Powell
World News – United States – Mnuchin withdraws some emergency lending programs related to Coronavirus Over the fed’s objections
Ref: https://www.marketwatch.com
