Trump Hasn’t Decided on Treasury Secretary Steve Mnuchin
WASHINGTON, DC - November 26, 2018
President Trump has expressed dissatisfaction with the Minister of Finance Steven Mnuchin, accusing him of appointing the Chairman of the Federal Reserve, which raises interest rates, reports the Wall Street Journal.
Trump fears that higher interest rates threaten economic growth, while approaching the election campaign 2020. However, after the publication of the Wall Street Journal, Trump has said he is quite happy with Steven Mnuchin’s performance despite reports he was dissatisfied with the Treasury Secretary.
“I am extremely happy and proud of the job being done by @USTreasury Secretary @stevenmnuchin1,” Trump said in a tweet.
However, Trump has repeatedly criticized the rate increases under Powell. In October, he called the raises “crazy,” “ridiculous,” and “my biggest threat.”
“From my point of view, the fed is the biggest risk [to the economy] because I think interest rates are rising too fast,” he told the Wall Street Journal in October.
The Fed raises interest rates about once a quarter, which increases the cost of debt service. Trump noted that he would prefer to take advantage of lower rates to repay the debt.
At a September meeting, the Federal Open Market Committee (FOMC) raised the Federal funds rate by 25 basis points to 2-2.25% per annum. It is expected that in December the rate will be raised for the fourth time in a year.
Trump also expressed displeasure with Mnuchin over stock market turbulence and the Treasury Secretary’s skepticism about trade actions against China.
“The FAKE NEWS likes to write stories to the contrary, quoting phony sources or jealous people, but they aren’t true. They never like to ask me for a quote b/c it would kill their story,” Trump said on Twitter.
A year ago when Trump picked Powell to head the Federal Reserve, Mnuchin, a former Goldman Sachs banker, was a strong advocate of his nomination to replace Janet Yellen.
Citing a person familiar with the matter, the Journal said Trump, in a conversation with someone who praised Mnuchin’s performance, mentioned stock market volatility and said: “If he’s so good, why is this happening?”
The benchmark Standard & Poor’s 500 index on Friday ended down 10.2% from its September 20 closing high, confirming it had entered a correction, a term used to describe a decline of at least 10% from the previous peak.
When the stock market has posted big gains, Trump has frequently tweeted about Wall Street’s performance. On October 2, Trump tweeted: “The Stock Market just reached an All-Time High during my Administration for the 102nd Time, a presidential record, by far, for less than two years.”
Mnuchin reportedly tried to moderate Trump’s policy in the trade dispute with China. The Republican president, seeking to slash a $375 billion trade gap with China, has imposed tariffs on $250 billion worth of Chinese imports to force concessions.
At a meeting last month, Mnuchin allegedly used the word “we” to refer to the tough-on-China trade practices.
“What do you mean ‘we,’ Steve?” Trump reportedly replied.