Federal Reserve Governor Lael Brainard said Tuesday that more government fiscal aid is needed to prevent deeper damage to a U.S. economy coping with a fresh surge in coronavirus cases.

Senate Majority Leader Mitch McConnell set up a vote to advance the nomination of Christopher Waller to the Federal Reserve Board, potentially clearing the way for his confirmation later this week.

Federal Reserve Chair Jerome Powell is cautioning lawmakers that the U.S. economy remains in a damaged and uncertain state, despite progress made in the development of COVID-19 vaccines.

The U.S. economy seems to be holding up despite a surge in COVID-19 cases and hospitalizations, clouding the case for more monetary stimulus, Federal Reserve Bank of Richmond President Thomas Barkin said.

The central bank will prolong the life of the Commercial Paper Funding Facility and three other programs while returning congressionally approved funds for five separate facilities that will shut down Dec. 31.

Illinois will borrow $2 billion through the Federal Reserve's Municipal Liquidity Facility to help manage its 2021 budget gap. The state previously borrowed $1.2 billion from the MLF for its fiscal 2020 pandemic hole.

Federal Reserve officials discussed providing more guidance on their bond-buying strategy during their Nov. 4-5 policy meeting.

Yellen will inherit an Office of State and Local Finance that has been a low-key operation since it was formed in 2014 to manage the Treasury’s response to Puerto Rico’s economic, fiscal and debt crisis.

The Federal Reserve’s bond-buying program is serving its purpose well at the moment, though the central bank could adjust the parameters if needed, New York Fed President John Williams said.

Municipal finance is not a top-tier issue for treasury secretaries, but Yellen has taken a strong stance for more direct aid to state and local governments during the pandemic.

With Yellen in charge, Biden’s Treasury Department will be prepared to join Fed Chairman Jerome Powell’s policy of lower-for-longer interest rates with extended, expansionary government spending.

With rates at the effective lower bound, increased asset purchases will be the Fed’s main monetary policy easing tool going forward, and that's what analysts will be scanning the FOMC minutes for.

The Federal Reserve said Friday it would comply with a Treasury Department request to return unused funds meant to backstop five emergency lending programs, moving to tamp down a public rift that arose a day earlier.

Analysts, issuers and lawmakers have mixed responses to the closure of the Municipal Liquidity Facility with some saying the move puts the municipal market in a precarious spot as COVID-19 continues to ravage the country.

While the facilities' availability inspired market confidence, the fact that $455 billion remains unused suggests shutting down the programs is unlikely to cause major problems, analysts say.

Treasury Secretary Steve Mnuchin told Fed Chair Jerome Powell to end most emergency lending programs created earlier this year, including the MLF, on Dec. 31.

Judy Shelton’s nomination to the Federal Reserve Board was blocked in the Senate Tuesday, a stunning defeat for Senate Majority Leader Mitch McConnell.

Tennessee Sen. Lamar Alexander joined Mitt Romney of Utah and Susan Collins of Maine in disapproving of Judy Shelton's nomination to the Federal Reserve Board, adding drama to a confirmation vote that had been targeted for this week.

The Federal Reserve’s changed policy framework is “an evolution, not a revolution,” according to Vice Chair Richard Clarida.

Financial markets should not fret if the Federal Reserve’s emergency lending facilities are not extended at the end of this year, when all but one are due to expire, Federal Reserve Bank of St. Louis Fed President James Bullard said.