President Donald Trump's administration performed a rapid about-face on a memo directing a freeze in all federal aid funding, with his acting director of the Office of Management and Budget rescinding the memo the day after a judge blocked its implementation.

The OMB memo had directed federal agencies to pause grants and loans pending a review of compliance with the agenda of President Donald Trump.

A new Office of Management and Budget memo walks back the previous directive that caused widespread confusion.

A federal judge signaled he will issue a temporary restraining order barring the Trump administration from freezing federal loans and grants.

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.

Sources said the Trump White House directed federal agencies to stop distributing loans and grants late Monday until a review is held to ensure the spending meets Trump's agenda.

The White House budget office on Wednesday rescinded an order freezing federal grants, according to a copy of a new memo obtained by The Washington Post, after the administration’s move to halt spending earlier this week provoked a backlash.