Treasury seeks to extend some emergency Fed programs but end others, including Main Street facility


The Treasury Department wants to expand a handful of Federal Reserve programs used to acquire markets through the early days of the coronovirus crisis, but end many others.

US Treasury Secretary Steve Mnuchin speaks during a press conference to announce the Trump administration’s reinstatement of sanctions on Iran at the US State Department in Washington on September 21, 2020.

Patrick Semanski | Pool | Reuters

Treasury Secretary Steven Menuchin said that to continue the Fed for another 90 days, there are programs that provide short-term “commercial paper” loans to businesses, as well as another paycheck security program for money market functioning. Related to is backstop.

However, Mnuchin also asked that other programs supported by the Treasury’s capital have now ended. These include two facilities that have purchased corporate bonds as well as the Main Street Lending Program, which was targeted towards small and medium-sized businesses.

Programs were set to expire at the end of the year. In early March they were set in markets that froze during a terrible sales frenzy as the epidemic was feared to escalate.

However, they were used for the most part and the subject of some criticism, particularly the Main Street facility.

“While portions of the economy are still severely affected and additional support is needed, financial conditions have responded and limited use of these facilities,” Mnuchin said in a letter to Fed Chair Jerome Powell.

Mnuchin nevertheless stated that “in an abundance of caution” he would like the Fed to survive the commercial paper funding facility and the money market lending facility, neither of which required Fed approval and the PPP liquidity facility.

This is breaking news. Check back here for updates.



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