The White House Office of Management and Budget on Wednesday rescinded a memo that froze federal grants and loans and created widespread confusion this week.

President Donald Trump’s budget office rescinded an order freezing spending on federal grants, less than two days after it sparked widespread confusion and legal challenges across the country, according to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 put a hold on all federal financial grants and loans, affecting tens of billions of dollars in payments.

The freeze on hundreds of billions of dollars of federal grants had been temporarily halted by a judge on Tuesday.

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 Trump administration ordered a temporary pause on federal grants, loans and financial assistance. What we know so far about the order.

WASHINGTON (Reuters) - The White House Office of Management and Budget has rescinded a Trump administration directive pausing federal loans, grants and other financial assistance, a White House official said on Wednesday.

The White House will pause federal grants and loans, as President Donald Trump works to ensure all federal spending aligns with executive orders.

The Vermont senators and representative gave a joint statement expressing their concern of this "authoritarian" decision to freeze federal grants.

White House press secretary Karoline Leavitt vehemently defended the administration’s sweeping freeze on federal aid, arguing Tuesday in her first press briefing that it was critical to scrutinize the scope of the government’s spending.

The acting budget director wants all federal agencies to ensure that their grants and programs aligned with the new Trump administration's priorities.