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A number of Wall Street figures and the US Chamber of Commerce have agreed with the Fed that the funding should not be cut. With COVID-19 infections and death rates skyrocketing in the United States, unemployment on the rise and the reintroduction of virus-related measures to reduce social and economic activity, financial markets and the US economy remain vulnerable.

Fed Chairman Jerome Powell had said this much earlier in the week, before Mnuchin’s move, saying he didn’t think it was still appropriate to let the programs expire. “When the time comes, and I don’t think that time is yet or very soon, we will put these tools away,” he said.

Once the funds were returned, it would take Congressional approval to refinance the program when, since Treasury loans to the Fed were already in place, the facilities could have been extended without Congress involvement.

If the Trump administration assumes that the Republicans will retain control of the Senate, which is likely but not certain, returning the unused funds would limit the ability of the Biden administration to use the funds to support businesses and organizations. devastated towns. by the pandemic.

While Mnuchin denied that the move was politically motivated, this is not how Democrats, or some in the markets, see it, calling it “economic sabotage”, “salting the earth” and “burning down.” the House”. Biden’s transition team described him as “deeply irresponsible.”

As the Fed moved away from a confrontation, the split between the two most powerful economic and financial agencies in the United States caused some concern in markets which viewed funding on similar terms to the Fed. – as a safety net against the prospect of another panic crisis in the credit markets.

Amid the worst pandemic wave in the United States, the Trump administration is working to lock down decisions before Biden can take office.

There is also the fear that the Trump administration, with its unprecedented attempts to overturn the results of the presidential election, or at least the credibility of the votes and the legitimacy of the Biden administration, is working to ensure that the new administration is a failure.

This could be in view of the midterms in 2022 or the election of 2024 when it is conceivable that Trump could run for re-election, or use the dedication of his base and his party control to support one of his children or at least. to determine the Republican candidate.

Amid the worst pandemic wave in the United States, the Trump administration is working to lock down decisions before Biden can take office.

Whether it’s drilling for oil in Alaska and national parks, withdrawing troops from Afghanistan, escalating tensions with Iran, adding new sanctions against China, bringing back the giants Mortgage Fannie Mae and Freddie Mac to private property, to weaken environmental standards or to appoint more judges, the motivation seems to undermine the ability of the Biden administration to act.

More importantly, there has been no movement on a new Congressional relief and stimulus plan, although the last of the emergency efforts put in place earlier this year is expected to expire at the end of next month. Democrats are sticking to their $ 2 trillion plan while Republicans only want to spend $ 500 billion.

There has been no progress towards compromise, even as the pandemic worsens and signs of economic stress reappear in the United States.

There were signs that the markets were upset by the emergence of the feud between the US Treasury and the Fed late last week, perhaps because it was so unusual – there is no history of this kind of public divergence – but also because it points to the broader risks of a transition from Trump to Biden that is also unparalleled and is occurring at such a vulnerable time for the United States.