Trump in talks to possible firing of Fed Chair Jerome Powell
- Author: David Armstrong Dec 26, 2018,
Dec 26, 2018, 20:46
Just prior to this CNBC report being released, CNN published an article citing people familiar with Mnuchin's call to the banks, and it painted a picture of complete confusion on all sides. "But I think that they will get it pretty soon", Trump told reporters in the Oval Office, referring to the USA central bank.
The stock market was only open for half a day Monday, and that was more than enough time for the Dow Jones Industrial Average to drop 2.9 percent to 21,792.20, breaking 1918's record for the worst Christmas Eve performance.
The following day, Mnuchin announced he had called senior executives from six of the largest American banks to discuss the market turmoil and received assurances.
Mr Trump continually boasted about Wall Street's steep climb during the first year of his presidency, but has sought to deflect blame since markets hit a rough patch this year.
The Journal also reported that members of Trump's administration are thinking of setting up a private meeting with the president and Powell in order to smooth over ill feelings between the two men.
"But what's bad is this made the papers, and says the government is very anxious", Krosby told the paper, adding that with investors focused on so many issues, "it's nearly as if gravity is pulling this market toward a lower level before it bottoms out".
Trump's latest remarks only created more uncertainty for already unnerved investors who have seen all of this year's stock market gains evaporate.
US President Donald Trump and the Federal Reserve chairman Jerome Powell.
U.S. SHUTDOWN: The partial U.S. government shutdown that started Saturday is unlikely to hurt the economy much, although it may deprive the financial markets of data about global trade and gross domestic product.
But the source painted a different picture of Mnuchin's standing behind the scenes.
The United States treasury secretary has on Monday, called the chief executive officers (CEOs) of six biggest banks of the U.S. and organized plans to summon a "plunge protection team", amid the USA government partial shutdown.
Mnuchin tweeted on Saturday that he had spoken with Trump and issued a quote that he attributed to the President denying Trump had suggested firing Powell.
Bank stocks were among then biggest decliners Monday. "Even the Fed and other agencies are very satisfied with the health of the banking system, to the point of relaxing a bit the regulatory grip".
Mnuchin took to Twitter again on Sunday to say he'd spoken to heads of the biggest US banks about liquidity and lending infrastructure, and reconvened a presidential working group established to sort out the Crash of 1987.
The move "smacks of desperation and nervousness", said Paresh Upadhyaya, a portfolio manager at Amundi Pioneer Asset Management in Boston.
As expected, the Fed went ahead and raised interest rates last week, offering only subtle concessions to investors' worries over slowing global growth.
On Sunday, Mnuchin made calls to top USA bankers and got reassurances that banks were still able to make loans, the Treasury said.