Though Mnuchin also asked the Fed to return hundreds of billions of dollars in unspent Cares Act money, Treasury alone does not hold that power
Treasury Secretary Steven Mnuchin on Thursday said he would not extend most of the emergency lending programs run in tandem with the Federal Reserve, a move the central bank immediately criticized, citing the fragile recovery.
The Fed’s exceedingly rare public response reflected a government divided on how to act as the pandemic surges across the nation, threatening a new wave of shutdowns and marking an inflection point of the economic recovery.
In a letter to Fed Chair Jerome H. Powell, Mnuchin not only said that several of the programs would wind down at the end of the year, but he also requested that unspent money allocated to the Fed under the first stimulus effort, the Cares Act, be reallocated by Congress. However, the Treasury Department does not have the sole authority to reallocate the funds and would need to secure Fed agreement. Continue reading.