Published: Thu, December 27, 2018
Markets | By Jeffery Armstrong

USA regulators tell Mnuchin nothing out of ordinary in markets

USA regulators tell Mnuchin nothing out of ordinary in markets

Secretary Mnuchin used the public notice to affirm that all of the banks' leaders informed him that ample liquidity remains available for consumer and business market lending, while Mnuchin stated that banks also pointed out that they have not experienced any clearance or margin issue, and that overall financial markets are continuing to function properly. He said he made calls to the CEOs of America's largest banks.

Jaret Seiberg is an analyst for Cowen & Co.

"It was totally out of left field and an odd thing to do", the person said, describing the timing of the call - on a Sunday before markets opened - as unusual.

Last week's turmoil in Washington which included a government shutdown that appears likely to last until at least Thursday and the abrupt resignation of Defense Secretary Jim Mattis has spooked markets worldwide.

President Trump's Treasury secretary called six top U.S. bankers on Sunday amid concerns over falling stocks, and has revealed he plans to convene a group of officials known as the 'Plunge Protection Team'. "Not only did he consult with the biggest banks, but he is talking to all of the financial regulators on Christmas Eve".

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The statement added that Mnuchin, who is on vacation in Cabo San Lucas, Mexico, will hold a call Monday with the President's Working Group on financial markets "to discuss coordination efforts to assure normal market operations".

Mnuchin's statement on banks caused many to worry about banks, despite there having been no concerns about banks.

"It raises the question of why Treasury needs to reassure if everything is okay", Seiberg wrote. The board's chairman, Jerome Powell, was nominated by Trump past year.

But beyond that, Trump has complained more broadly that Mnuchin isn't doing enough to stabilize markets, the person said, viewing recent plunges as a sign his team hasn't assured investors of the economy's strength. The market is also reacting to the Trump administration's trade war with China.

Mr Trump has criticised the United States central bank for raising interest rates this year, which could further dampen economic growth.

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Yet Trump has taken outsized umbrage at the moves, deeming them created to damage him politically.

Yes, although it does not deal exclusively with Wall Street panic. "The Fed is like a powerful golfer who can't score because he has no touch - he can't putt!" Investors are concerned that Trump may fire Federal Reserve Chairman Jerome Powell.

A day earlier, Mnuchin tweeted that he had spoken with the President, relaying a message from Trump: "I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so".

Incoming White House chief of staff Mick Mulvaney also attempted to calm investors' nerves on Sunday, saying in an interview on ABC that the fundamentals of the USA economy are strong despite the recent market slide. He's raised the possibility of sending an envoy to meet with Powell directly, according to the person familiar.

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