End of Fed stimulus

The news that the US Treasury is ending emergency loan programs has an impact on the market.

In a letter, Mnuchin told Fed Chairman Jerome Powell that $ 455 billion designated by the Treasury under the Cares Act must be made available to Congress, creating uncertainty about the future of the monetary stimulus programs.

Mnuchin asked the Fed on Thursday to return the money allocated by the law to help loans to businesses and local governments, marking the end of most programs that the central bank considers vital to the recovery of the economy.

However, Senate Democratic Minority Leader Chuck Schumer said Republican Majority Leader Mitch McConnell has agreed to revive negotiations for a new tax relief package.

The market reaction was the rise of the dollar, although less than bitcoin, and the same were the three main stock indices of Wall Street. Copper was also rising.

But the yield on 10-year Treasuries fell to a 10-day low and gold fell to $ 1.866 an ounce, its second weekly low. Investors withdrew $ 4 billion in gold, the largest exodus in history, in the past week, Bank of America said Friday.

The dollar rose after its downward trend was interrupted by Steven Mnuchin’s announcement, which ended Fed-enabled loans.

Mnuchin’s decision reallocated about $ 455 billion.

The Fed said it “would prefer that the full set of structures created continue to serve its role as a backup,” in open confrontation with the government.


Chicago Fed Chairman Charles Evans said he was disappointed in US Treasury Secretary Steven Mnuchin’s decision to end several of the loan programs on December 31. “Endorsement is important for quite some time, so it’s disappointing,” he said.

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