Disagreement has arisen over the approach to the corona crisis between two of the main economic policy makers. Finance Minister Steven Mnuchin disagrees with FRS’ Jerome Powell on the spending of part of the emergency aid.
The controversy is about maintaining a number of support packages to support the economy. In March this year, the US Congress approved a support package worth USD 2200 billion. Of these, some USD 500 billion was earmarked for a series of emergency relief and Fed-guaranteed credits. In the end, only a small part of that money, some 25 billion dollars, was used for that purpose.
Mnuchin stated in a letter to Fed boss Powell that $ 455 billion of the previously promised stimulus, through the CARES act, should be redirected. This is because hardly any use is made of it. Congress should decide on a new destination for the money.
According to Powell, it is important that the emergency packages remain as they are to help the US economy through the crisis. It considers that the full range of emergency measures set up during the crisis should be maintained, also because the situation is still tense and the economy is vulnerable.