Many components of the trillion-dollar Cares aid package from spring expire at the end of the year, including the central bank’s emergency loans. The fact that the Treasury and the Fed are no longer pulling in the same direction does not bode well for the coming weeks.
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Treasury Secretary Steven Mnuchin (pictured) published a letter to Fed Chairman Jerome Powell announcing the end of most emergency loan programs.
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As recently as Tuesday, the head of the Federal Reserve System (Fed), Jerome Powell, said that the US Federal Reserve was at its disposal and would continue to use all its instruments to prop up the American economy. Yes, the various corona emergency loan programs that were set up in the spring and summer with the blessing and capital contributions from the Treasury would still be needed, he said.
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