Reuters State Secretary Steven Mnuchin Listens Like US President Donald Trump Speaks At The White House. President Donald Trump, who…
State Secretary Steven Mnuchin Listens Like US President Donald Trump Speaks At The White House.
President Donald Trump, who asked for the Federal Reserve to stop raising interest rates, was pleased with President Jerome Powell’s speech last week, Finance Minister Steven Mnuchin said on Monday.
“I think the president was pleased with the speech last week,” said Mnuchin in an interview with CNBC.
On Tuesday, one day before Powell talked, Trump told the Washington Post that he was not even “happy” with his selection of Powell. [1
9659004] On Wednesday, the Powell Economics Club in New York told us that interest rates are “just below” the level where they will not stimulate the economy.
Read: Powell believes interest rates are “just below”, where they will not stimulate the economy
Related: Why economists insist on Powell were not as good as the market believe
The financial markets grabbed the comments as dovish, with US stocks
DJIA, + 0.77%
Collection and Dollar
falls, as it is indicated that interest rates may not go as high as Fed seemed to suggest a few weeks ago.
Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said investors were correct to know the dovish shift in Powell’s comments.
“We believe most investors got the basic message right: Powell showed that Fed acknowledges that it may not be far to go before. It reaches a neutral rate and, in view of everything that happens, it will continue carefully from here “said Guha.
Mnuchin said that Powell’s comments that they were close to neutral are “important” and say he was pleased with Fed based decisions on incoming data.
“They do not trust super-friendly models and stars and such, they will respond to numbers,” he added.
The Treasury Secretary said that the latest inflation figures “have been quite at Traktive.”
“The fact that oil prices have come down is very important in terms of inflation,” said Mnuchin.
Steve Poldell, a columnist with the Washington Post, criticized Powell for not pushing back on Trump. 19659004] In a column he said that Trump will now be emboldened to take every opportunity to police the Fed.
“I really doubt that Powell actually succumbed to the presidential pressure, or meant to announce a change of policy, but it looked like it looked like many sophisticated people,” he said.
In an interview last week with the Wall Street Journal, Minneapolis President Neel Kashkari said that Trump’s comments had no impact on Powell.
“I do not think the political noise has any impact on decision makers’ thought processes,” Kashkari said.
Central banks are “fully focused on data and analysis, so I do not think there is any link between politics and the chairman’s comments,” he said.
Asked about reports that Trump is dissatisfied with supporting Powell’s appointment to the Fed leadership, said Mnuchin but said he and the president do not look at everything.
“I will continue to give my best advice to the president,” he said.
Mnuchin added that he believed Powell faced a “hard job” that cleaned up a stir of his predecessors.
Powell “remained with the hard work of trying to normalize interest rates and stabilize the portfolio so that he has firepower if the economy slows down to juice the economy,” said Mnuchin.
“He remained with a giant portfolio that increased over 4 trillion dollars in the former administration as he tries to do the right size,” says Mnuchin.
“We had interest rates at zero for too long to try and help the Obama economy and it did not matter much,” he said.
Mnuchin confirmed a Bloomberg report as he privately asked bond traders if they would rather strengthen the Fed strategy by reducing the balance sheet faster than by raising interest rates.
Mnuchin said that he simply demanded opinions from an advisory committee for the finance ministry set up to provide government feedback.
The group was divided in its response, according to the Bloomberg report.