The dollar is expected to continue to fall as progress on a vaccine and the expected choice of former Federal Reserve Chair Janet Yellen as the next U.S. Treasury secretary relieved two big uncertainties for investors. Yellen is 74, and widely respected amongst both democrats and republicans.
Like several other Biden appointees, Yellen would be another "first" in a major Cabinet role: No woman has held the position of Treasury secretary before.
A Treasury official said on Friday that funds that cover about $ 25 billion in existing loans from the facility will remain in the Treasury, but that any money reimbursed from the loans can not be used for anything else without congressional approval.More news: Ontario records record daily high of 1855 new COVID-19 cases
Biden's team called Mnuchin's move "deeply irresponsible". "By contrast, the CARES Act funds had specific uses, and weren't available for general government spending purposes". "For its part, the Fed should not go along with this attempted sabotage and should retain the CARES Act funds it already has". The law does specify that unused money on January 1, 2026, needed to be put in the general account and used for "deficit reduction". The Fed publicly objected to the move, but agreed to return the funds.
According to Bloomberg, "Mnuchin' clawback would make it impossible" for Janet Yellen, President-elect Joe Biden's pick to lead the Treasury Department, to utilize the funds "without lawmakers' blessing".
A Treasury spokesperson confirmed a Bloomberg report saying that the reclaimed money will be put into the Treasury's General Fund, but denied that moving it out of the Exchange Stabilization Fund would put the funds off limits.More news: Mohsen Fakhrizadeh, Iran`s top scientist linked to military nuclear program, assassinated
Mnuchin said that many markets are no longer in danger of seizing up and don't need aid beyond next month, when the programs are scheduled to expire.
"For companies that are impacted by Covid - such as travel, entertainment and restaurants - they don't need more debt, they need more PPP money, they need more grants", Mnuchin said in an interview last week.
Later, the United States dollar index fell slightly to 92.47 after the WSJ reported that Janet Yellen was reportedly selected by Biden for the post of Treasury secretary.More news: Utah to play at Washington on Saturday, November 28
U.S. Federal Reserve policymakers discussed how the central bank's asset purchases could be adjusted to provide more support to markets and the economy during the November policy setting meeting.