WASHINGTON (AP) — President Donald Trump’s budget office on Wednesday rescinded an order freezing spending on federal grants, less than two days after it sparked widespread confusion and legal challenges across the country, according to two people familiar with the matter.

The Trump administration has rescinded his previous order to freeze trillions of dollars of grants and loans. The White House Office of Management and Budget retracted its order from Monday in a memo sent out Wednesday, according to documents obtained by NBC News.

The White House Office of Management and Budget on Wednesday rescinded a memo that froze federal grants and loans and created widespread confusion this week.

The full extent of the order was not immediately clear, but the directive sent to government agencies on Monday threatened to paralyze a vast swath of federal programs.

The new memorandum, just two sentences long, will allow agencies to continue their normal operations after uncertainty over the impact of the initial directive caused widespread chaos across government. It followed a temporary injunction by a federal judge that prevented the original Office of Management and Budget memo from taking effect.

Fox News senior White House correspondent Jacqui Heinrich reports on the Trump administration’s decision to rescind its freeze on federal grants on ‘America Reports.'

The White House rescinded an order today that froze trillions of dollars in federal grants and loans in an effort to purge the government of what President Trump has called a “woke” ideology. The directive had been temporarily blocked by a federal judge.

U.S. President Donald Trump on Wednesday will sign an executive order on school choice that would also end "funding for public schools that support critical race theory and other divisive measures in their curriculums,

White House officials said VA financial assistance programs do not violate rules banning diversity and inclusion efforts.

The Trump administration has put a hold on all federal financial grants and loans, affecting tens of billions of dollars in payments.

The White House Office of Management and Budget has rescinded a Trump administration directive pausing federal loans, grants and other financial assistance, a White House official said on Wednesday. (Reporting by Jeff Mason and Jasper Ward) Copyright 2025 Thomson Reuters.