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Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell are shown during a September appearance on Capitol Hill.
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Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell on Tuesday are slated to testify before the Republican-run Senate Banking Committee, giving their latest assessment of the federal government’s response to the coronavirus crisis.
The two officials are expected to draw questions from lawmakers about Mnuchin’s decision earlier this month not to extend some emergency loan programs his agency set up with the Federal Reserve that are set to expire at the end of the year. Powell’s Fed said that it opposed the Treasury secretary’s decision.
“We expect Mnuchin to face several questions and criticisms regarding his decision to have the Fed return unused funds and permit several facilities to expire on December 31,” said Height Capital Markets analyst Edwin Groshans in a note.
Mnuchin and Powell both have released their opening statements.
“I strongly encourage Congress to use the $455 billion in unused funds from the CARES Act to pass an additional bill with bipartisan support,” Mnuchin said in his statement.
Meanwhile, Powell said in his statement that the central bank’s actions to backstop a range of credit markets after the coronavirus convulsed Wall Street this past spring had unlocked almost $2 trillion to support businesses, cities and states.
The testimony comes amid record hospitalizations due to COVID-19 — and as President-elect Joe Biden rolls out his economic team that will take over next month from President Donald Trump’s team.
“The key lawmaker to watch on Tuesday is Sen. Pat Toomey (R-PA) who will likely be the Chairman of the Banking Committee in 2021, if Republicans win at least one of the Georgia races and retain the Senate majority. Toomey has opposed extending the additional ESF funds and we want to see how hard he digs in on the issue,” said Brian Gardner, chief Washington policy strategist at Stifel, referring to the CARES Act’s Exchange Stabilization Fund.
U.S. stock-index futures ES00, +1.06% YM00, +1.07% were trading higher Tuesday, with equities SPX, +1.26% DJIA, +1.24% aiming to build on a historic November rally that was fueled in part by optimism over progress on COVID-19 vaccines.
