Under its contracts with Treasury, the Fed can and should reject the request to return the $195B in CARES Act funds Treasury has already committed. But this indicates Treasury will force the Fed to shut down key programs at year-end, needlessly eliminating market protection. 1/ https://twitter.com/vtg2/status/1329534843366100998

Luckily, whatever the Trump Treasury does, the Biden Administration has the authority to ask the Fed to restart these lending programs next year. And there clearly will still be a need for the small business and state and local lending programs two months from now. 2/

While Secretary Mnuchin claims congressional intent was to halt all new loans at year-end, the text of the CARES Act doesn't say that. At a minimum, the Fed can continue to make loans using the $195B in equity Treasury has already committed. 3/ https://twitter.com/BharatRamamurti/status/1325452718115180545?s=20

This is an unjustified and ideological decision by the Treasury Department. It is incumbent on the Fed to reject this request and prepare to restart these lending programs as quickly as possible once President-elect Biden is sworn in. END

Since this is all a bit complicated, taken together this all means:

-Fed can retain $195B for lending if it rejects Treasury request
-Fed won't be able to lend after 12/31 but could restart lending after Biden takes over on 1/20