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News > U.S.

US Stocks Plummet As Mnuchin Makes 'Very Odd' Call to Bank CEOs

  • U.S. President Donald Trump with Treasury Secretary Steven Mnuchin (L) at his side in the lobby of Trump Tower in Manhattan, New York, U.S., Aug. 15, 2017.

    U.S. President Donald Trump with Treasury Secretary Steven Mnuchin (L) at his side in the lobby of Trump Tower in Manhattan, New York, U.S., Aug. 15, 2017. | Photo: Reuters

Published 24 December 2018

In a 'very odd' move, the US Treasury Secretary released a statement saying he talked with heads of biggest US banks reporting they are still open for business.

United States Treasury Secretary Steven Mnuchin said he made calls to the heads of the country's six largest banks Sunday to reassure investors that banks had “ample liquidity.” By Monday morning the U.S. stock market bench marker, Dow Jones Industrial Average fell another 434 points after it lost 1,655 last week.

Trump's 'Racist' Wall Approved by House

In a statement released on his Twitter account, Mnuchin said he had spoken directly with the heads of Bank of America, Citi, Goldman Sachs, and JPMorgan Chase financial institutions, among others, and revealed: "The [bank's chief executives] confirmed that they have ample liquidity available for lending to consumer, business markets, and all other market operations," the Treasury said in a statement attached to a tweet from Mnuchin.

Last week, stocks fell for the first time down to October 2008 levels when the U.S. financial crisis just began.

The market down spiral comes just as President Donald Trump partially shut down the government after the Senate didn’t approve the US$5 billion the president is demanding for his massive border wall with Mexico, a key campaign promise during the 2016 electoral campaign that Trump previously insisted Mexico would pay for.

BBC pundits said Mnuchin’s statement was "very odd" and could "spook markets, not reassure them," and questioned if the move was an overreach of executive powers.

"People are wondering whether this is really a role for the US Treasury secretary," said BBC financial show host, Dominic O'Connell.

Mnuchin tried to dismiss reports that President Donald Trump is threatening to fire Federal Reserve Chairman Jerome Powell after he raised interest rates last week.

The U.S. treasury secretary tweeted that Trump "never suggested firing" Powell and did not believe he had the right to do so.

Investment analysts say that U.S. economics are being driven to unstability by Washington politics. Rick Meckler of Cherry Lane Investments based in New Jersey commented to the BBC: "The administration hasn't been all that stable when it comes to changing their mind. Politically, these are very strange times."

As of Monday morning, Christmas Eve, Trump and Congressional leaders hadn’t reached a border wall deal making it likely that the shutdown, which has closed down parts of the Departments of Homeland Security, the Justice Department, Department of the Interior, the State Department, and The Department of Housing and Urban Development will continue until early January when the new Democrat-controlled, congressional session begins.

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