Federal Reserve reportedly returns $42 billion to Treasury following November scuffle over funds, report says

Federal Reserve reportedly returns $42 billion to Treasury following November scuffle over funds, report says

Federal Reserve Chairman Jerome Powell talks with U.S. Treasury Secretary Steven Mnuchin during the G20 finance ministers and central bank governors meeting in Fukuoka, Japan June 8, 2019.

REUTERS/Kim Kyung-Hoon/Pool

The Federal Reserve has started transferring billions of dollars in unused stimulus funding back to the Treasury, following on an agreement made after a November scuffle over its return. 

The transfer began with $42 billion, and another $20 billion is expected to be returned soon, Bloomberg reported Friday, citing data from the Fed.

"While portions of the economy are still severely impacted and in need of additional fiscal support, financial conditions have responded and the use of these facilities has been limited," Mnuchin wrote in a November 19 letter. 

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The Federal Reserve has started transferring billions of dollars in unused stimulus funding back to the Treasury, following on an agreement made after a November scuffle over its return. 

The transfer began with $42 billion, and another $20 billion is expected to be returned soon, Bloomberg reported Friday, citing data from the Fed. About $195 billion had been promised to the Fed, which will reportedly keep $40 billion to cover any losses.

The Treasury funding had backed four CARES Act lending