The Fed responded -- in a rare public fracture between the two institutions -- that it “would prefer that the full suite of emergency facilities” remain as a backstop “for our still-strained and vulnerable economy.”
Jobless Americans
In his testimony, Powell repeated that the Fed would, as requested by Mnuchin, return the unused portion of funds allocated to the lending programs by the end of the year. He also emphasized that non-Cares Act funds remain at the Treasury’s disposal -- should it seek to support any additional lending facilities.
On the economy, Powell acknowledged that growth and the labor market had significantly rebounded since the second quarter of this year, but that many Americans continued to suffer.
“Although we welcome this progress, we will not lose sight of the millions of Americans who remain out of work,” he said.
Mnuchin, in his own prepared testimony, said the Trump administration hoped to support the economy using funds that Congress had initially earmarked for backstopping lending facilities and other measures under the Cares Act passed in March.
“I strongly encourage Congress to use the $455 billion in unused funds from the Cares Act to pass an additional bill with bipartisan support,” he said. “The administration is standing ready to support Congress in this effort to help American workers and small businesses that continue to struggle with the impact of Covid-19.”
-With assistance from Saleha Mohsin.
This article was provided by Bloomberg News.