Name: Steven Mnuchin acts to hobble the Fed's coronavirus powers
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Steven Mnuchin acts to hobble the Fed's coronavirus powers

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Photo: Toni L. Sandys/Pool/Getty ImagesTreasury Secretary Steven Mnuchin was one of the of the coronavirus crisis, working hand-in-glove with Fed chair Jay Powell to give the central bank all the ammunition it needed to fight the virus and the associated economic recession. Now, he's trying to .Why it matters: If he's successful, Mnuchin will effectively disarm the Fed, creating a lot more economic downside once President-elect Biden takes office.How it works: Mnuchin's predecessor Hank Paulson once explained, "If you’ve got a bazooka, and people know you’ve got it, you may not have to take it out."The programs worked exactly as intended, which is to say that they were barely used. Borrowers found lenders in the private sector, and the Fed backstop remained reassuringly present.The big picture: In a crisis, the distinction between fiscal policy (Treasury) and monetary policy (the Fed) tends to blur. A lot of the Fed programs announced this spring were possible only because they were approved by the Treasury, which promised to cover any costs in the event that they ended up losing money.What they're saying: The Fed, which until now has taken great pains to appear on the same page as Treasury, put out a stunning statement saying it "would prefer that 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." The bottom line: The crisis has seen Powell rise to the occasion in a very impressive manner. But he couldn't have done it without Mnuchin. Now, it seems, Mnuchin is trying to ensure that Powell won't have the same powers under Biden.A battle over stimulus escalated in Washington on Thursday night: Treasury Secretary Steven Mnuchin put emergency lending programs it set up alongside the Fed chair Jerome Powell on the chopping block.Why it matters: The coronavirus pandemic is worse than when these facilities were established in the spring — and economists worry about a resulting steep economic backslide. Republican leaders in Michigan said they "have not yet been aware of any information that would change the outcome of the election" in the state after meeting with President Trump at the White House Friday. Why it matters: The meeting was part of a long-shot effort by Trump and his campaign to prevent Michigan from certifying President-elect Joe Biden’s victory in the state, per . But state Senate Majority Leader Mike Shirkey (R) and Speaker of the House Lee Chatfield (R) made clear they would not be intimidated into diverging from the normal election process. Donald Trump Jr. tested positive for the coronavirus at the beginning of this week and has been in quarantine, though he is not experiencing any symptoms, according to a spokesperson for the president's son.Why it matters: His diagnosis adds to the list of people associated with President Trump who have been infected by the virus, including .

Photo: Toni L. Sandys/Pool/Getty ImagesTreasury Secretary Steven Mnuchin was one of the of the coronavirus crisis, working hand-in-glove with Fed chair Jay Powell to give the central bank all the ammunition it needed to fight the virus and the associated economic recession. Now, he's trying to .Why it matters: If he's successful, Mnuchin will effectively disarm the Fed, creating a lot more economic downside once President-elect Biden takes office.How it works: Mnuchin's predecessor Hank Paulson once explained, "If you’ve got a bazooka, and people know you’ve got it, you may not have to take...

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Steven Mnuchin acts to hobble the Fed's coronavirus powers

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