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Trump Team Faces Hurdles Getting Fed to Help Battered Oil Firms

  • Mnuchin says he’s weighing lending program for the industry
  • Fed officials seen rejecting creation of oil-specific program
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Mnuchin Looking at Lending Program for Struggling Oil Companies

The Trump administration faces significant hurdles in getting the Federal Reserve to help rescue an oil industry squeezed by plunging crude prices given the central bank’s aversion to helping specific industries and its lack of authority to help businesses that are insolvent.

The Fed regards loan programs aimed at a specific industry as credit allocation -- something Chairman Jerome Powell specifically rejected in an April 9 speech. But Treasury Secretary Steven Mnuchin told Bloomberg News Thursday that the administration was looking to help battered oil companies by “providing a lending facility for the industry.”