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Wall Street ‘Startled’ By ‘Unusual’ Trump Admin Calls To Banks Amid Sell-Off

   DailyWire.com

Amid the most dramatic sell-off since 2008, Treasury Sec. Steve Mnuchin has “startled” Wall Street analysts, economists, and bankers with an “unusual” statement about the credit capacity of the nation’s six largest banks, the Washington Post reports.

In a statement posted on Twitter Sunday, Mnuchin said he had “convened individual calls with the CEOs of the nation’s six largest banks” and assured the American public that those banks had enough credit to extend to Americans and their businesses.

“Secretary Mnuchin conducted a series of calls today with the CEOs of the nation’s six largest banks: Brian Moynihan, Bank of America; Michael Corbat, Citi; David Solomon, Goldman Sachs; Jamie Dimon, JP Morgan Chase; James Gorman, Morgan Stanley; Tim Sloan, Wells Fargo,” reads the statement. “The CEOs confirmed that they have ample liquidity available for lending to consumer, business markets, and all other market operations. [Sec. Mnuchin] also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly.”

“The statement came hours before Asian markets were set to open and after a sharp sell-off that made last week the worst for U.S. markets in a decade,” the Post’s Damian Paletta and Josh Dawsey report. “President Donald Trump has been furious at the sell-off, and efforts by Mnuchin to inspire confidence in the market have so far failed.

The Post cites several analysts who told the paper that the outreach effort was more likely to backfire than help. “Panic feeds panic, and this looks like panic in the administration,” said Grant Thornton chief economist Diane Swonk. “Suggesting you might know something that no one else is worried about creates more unease.”

“It’s going to raise the question of whether Treasury and Mnuchin know something the markets don’t,” said investment banking firm research director Brian Gardner. “Without clarifying further, it’s going to weigh on the markets.”

“If this weren’t the end of December, I would have thought it was April Fools,” Jared Bernstein, former chief economist to Vice President Joe Biden, told the Post. “The markets are already nervous enough. It’s like sending out a message saying our space shields can intercept incoming asteroids. Uh, I didn’t know there were any coming our way.”

“No one thought we were at crisis level,” an anonymous Trump adviser said of Mnuchin’s statement. “It’s going to create more of an issue than we had already.”

Mnuchin’s contact with the nation’s six leading banks suggests potentially deeper problems than the stock market sell-off, which has seen several market sectors fall some 20%. According to the Post’s anonymous sources, Trump has been putting “enormous pressure” on Mnuchin to stop the slide, which threatens to undermine the strong economic growth that has thus-far marked his presidency.

The Post and other outlets reported that Trump even considered taking the unusual step of firing Federal Reserve Chairman Jerome Powell after he raised interest rates against Trump’s advice, but Mnuchin denies the rumors, reportedly at Trump’s request. Powell, say insiders, is close to “Jeff Sessions-level” disfavor with Trump.

In his statement Sunday, Mnuchin assured the public that the economy is doing well. “We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business,” said Mnuchin.

Mnuchin also addressed fears about the impact of the partial government shutdown. “With the government shutdown, Treasury will have critical employees to maintain its core operations at Fiscal Services, IRS, and other critical functions within the department.”

Reuters notes that Mnuchin’s scheduled Monday call with the president’s Working Group on Financial Markets “includes Washington’s main stewards of the U.S. financial system and is sometimes referred to as the ‘Plunge Protection Team.'”

Read the full Post report here.

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