The Treasury Department has plenty of “firepower” still in its arsenal after announcing that key Federal Reserve lending programs born amid the COVID-19 pandemic will be allowed to expire at the end of the year, according to Treasury Secretary Steven Mnuchin.
“To the extent that we have over $750 billion of firepower between what’s in the Exchange Stabilization Fund and what the Federal Reserve can do going forward,” Mnuchin told CNBC’s “Squawk Box.” “Markets should be very comfortable that we have plenty of capacity left.”
Mnuchin on Thursday said that money set aside by the Treasury Department to be used for Fed lending programs that has not yet been spent should be given to Congress to be reallocated. Treasury was given $455 billion as part of the CARES Act with much of that used to support Fed lending to businesses, nonprofits and local governments.
There is about $25 billion of outstanding loans through the remaining facilities, according to Mnuchin. The Fed had through Thursday lent $5.4 billion in Main Street loans and $1.7 billion through the Municipal Liquidity Facility.
The Federal Reserve said in a statement that it would prefer the “full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”