Could the spat between the Fed and Trump’s Treasury derail markets?

America’s central bank seems to have fallen out with the US Treasury department. John Stepek explains what’s going on, and how it could affect the markets.

Steven Mnuchin and Jerome Powell
Steven Mnuchin and Jerome Powell: having a little fight
(Image credit: © Drew Angerer/Getty Images/Bloomberg via Getty Images)

A spat has broken out between the Federal Reserve – America’s central bank – and the US Treasury department. Steve Mnuchin, the US Treasury Secretary (equivalent of the chancellor over here), has told the Fed that he won’t be renewing some of their emergency lending facilities after they expire at the end of next month.

The US central bank, meanwhile, retorted 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."

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.