WASHINGTON– President Donald Trump said Tuesday he remains confident in his treasury secretary, a day after markets tanked on fears about the Federal Reserve and a peculiar call between Treasury Secretary Steve Mnuchin and bank CEOs.
“Yes I do,” Trump said when asked whether he had confidence in Mnuchin. “Very talented, very smart person.”
Still, Trump repeated his belief the Federal Reserve is raising interest rates too quickly, blaming the decision on a booming economy.
“They’re raising interest rates too fast,” he said in the Oval Office after a Christmas Day phone call with US troops. “They think the economy is so good but I think that they will get it pretty soon, I really do.”
“The fact is the economy is doing so well they’re raising interest rates,” he said.
Trump said he remained confident in American firms, and indicated investors should not fear the markets.
“I have great confidence in our companies. They’re doing very well,” he said. “I think its a tremendous opportunity to buy. Really a great opportunity to buy.”
Trump’s comments come as Wall Street ended a brutal week on Friday and remained on track for the worst month since the 2008 financial crisis.
Mnuchin held a call with big bank CEOs on Sunday following the turbulent week on Wall Street.
After the call, the secretary issued a statement publicly declaring that the markets have enough liquidity for lending.
The six CEOs who spoke individually by phone with Mnuchin were “totally baffled” and found the encounters puzzling and largely unnecessary, a person familiar with the calls told CNN.
Investors have also been concerned that Federal Reserve Chairman Jerome Powell may be fired by Trump, who has begun asking advisers whether he has the legal authority to fire the Fed chair. Part of Trump’s frustration with Powell has been the Fed chair’s announcement last week of another hike in the benchmark interest rate, which caused markets to tumble.
Mnuchin tweeted on Saturday that he spoke with the President, relaying that Trump said, “I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so.”
But on Monday, the President tweeted that the “only problem our economy has is the Fed,” after which the market took a sharp drop.
Mnuchin’s attempts over the weekend to assure investors only seemed to make matters worse as the confusing signals from Washington sent the markets plunging.
The markets closed Christmas Eve down sharply, with the Dow dropping 653 points and the S&P 500 nearing a bear market.