Mnuchin Asks Fed to Return $455 Billion in Unspent Covid-Relief Funds

Mnuchin Asks Fed to Return $455 Billion in Unspent Covid-Relief Funds

"The liquidity and capital position of USA banks ensure that they can fulfill the financing requirements of their customers", Mnuchin wrote in the letter.

"The Fed has been one of the only sources of stability in Washington and removing its latitude to offer support in a shaky recovery is simply nonsensical", said Isaac Boltansky, director of policy research at Washington-based Compass Point Research & Trading.

"This will allow Congress to re-appropriate $455 billion, consisting of $429 billion in excess Treasury funds for the Federal Reserve facilities and $26 billion in unused Treasury direct loan funds".

"The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy", the Fed said.

The World Trade Organization said while global trade in goods had rebounded in the third quarter from lockdowns, there would be a slowdown at the end of 2020.

"When the right time comes, and I don't think that time is yet, or very soon, we'll put those tools away", he said in an online discussion with a San Francisco business group.

A senior Democratic aide told Reuters there had been a mid-afternoon meeting on Thursday among congressional aides that discussed coronavirus relief and efforts to pass a US$1.4 trillion (RM5.72 trillion) Bill to keep government agencies operating beyond December 11 when current funding expires.

Mr Pat Toomey, a Republican senator poised to lead the Banking Committee, which overseas the Fed, if Republicans hold the Senate, applauded the Treasury's actions.

U.S. Treasury Secretary Steven Mnuchin briefs reporters on President Donald Trump's newly signed executive order imposing new sanctions on Iran, at the White House on June 24, 2019 in Washington, DC.

"These facilities. have successfully achieved their intended goal", he said.

The panel's two Democrats wanted the Municipal Liquidity Facility not only extended, but its terms adjusted to make it more favorable for bond issuers.

"Under its contracts with Treasury, the Fed can and should reject the request to return the $195B in CARES Act funds Treasury has already committed", tweeted Bharat Ramamurti, a former aide to Sen. "But this indicates Treasury will force the Fed to shut down key programs at year-end, needlessly eliminating market protection". Bostic is on the shortlist to be Biden's Treasury secretary. "We need this money to go help small businesses that are still closed".

He did however approve 90-day extensions for four programs including those related to major financial institutions known as primary dealers, commercial paper, which finances things like auto loans and home mortgages, as well as the Paycheck Protection Program of loans and grants to small businesses.

Investor sentiment was also affected by data that showed COVID-19 hospitalisations across the United States jumped by almost 50% in the last two weeks, threatening the recovery of the world's largest economy as cities and states began to impose lockdowns.

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