President Donald Trump on Tuesday expressed confidence in Treasury Secretary Steven Mnuchin amid worries over a weakening economy and a stock market slump, but repeated his criticism of the U.S. Federal Reserve, saying it has raised interest rates too quickly.
Speaking to reporters in the Oval Office after a Christmas video conference with U.S. troops deployed abroad, Trump also said U.S. companies were “the greatest in the world” and presented a “tremendous” buying opportunity.
Asked if he has confidence in Mnuchin, Trump said: “Yes, I do. Very talented guy. Very smart person,” he said. His comments came after Mnuchin on Monday held a conference call with U.S. regulators to discuss plunging U.S. stock markets.
The call did more to rattle markets than to assure them. All three major U.S. stock indexes ended down more than 2 percent on the day before the Christmas holiday. The S&P 500 has lost about 19.8 percent from its Sept. 20 closing high, just shy of the 20 percent threshold that commonly defines a bear market.
Mnuchin also spoke on Sunday with the heads of the six largest U.S. banks, who confirmed they have enough liquidity to continue lending and that “the markets continue to function properly.”
Investors said his move to convene a call with the president’s Working Group on Financial Markets, known as the “Plunge Protection team,” may have weighed on sentiment.
On Tuesday, Trump praised U.S. companies and said their lower stock prices present an opportunity for investors. “I have great confidence in our companies. We have companies, the greatest in the world, and they’re doing really well. They have record kinds of numbers. So I think it’s a tremendous opportunity to buy.”
U.S. stocks have dropped sharply in recent weeks on concerns over weaker economic growth. Trump has largely laid the blame for economic headwinds on the Fed, openly criticizing its chairman, Jerome Powell, whom he appointed.
“They’re raising interest rates too fast because they think the economy is so good. But I think that they will get it pretty soon,” Trump said, repeating his criticism.
Media reports have suggested Trump has gone as far as discussing firing Powell, and he told Reuters in August that he was “not thrilled” with the chairman.
On Monday, Trump said “The only problem our economy has is the Fed.”
The Fed hiked interest rates again last week, as had been widely expected.