Trump administration cuts off emergency Federal Reserve programs as coronavirus cases spike

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In a letter sent Thursday to Fed Chairman Jerome Powell, Mnuchin asked the central bank to return some $455 billion in unused funding for programs set to expire December 31. He added that Congress would then be able to re-appropriate the money for other purposes. The decision would allow several programs to end that were intended to help businesses that have been struggling as the pandemic wreaks havoc on the US economy. The money was set aside in March as part of the CARES Act, a $2 trillion stimulus package meant to prop up the ailing economy by providing financial assistance and loans for distressed companies, among other measures. The Fed programs “have clearly achieved their objective,” Mnuchin wrote. “Markets responded positively, spreads tightened, and banks continued lending.”The move was immediately met with backlash from Corporate America: The US Chamber of Commerce blasted the decision as one that closes the door on important liquidity options for businesses at a time when they need them most,” adding that it “unnecessarily ties the hands of the incoming administration.” The decision also puts the Treasury Department squarely at odds with the Fed. The central bank, a typically apolitical institution, swiftly responded to Mnuchin’s letter in …

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