Trump says he’s confident in Mnuchin after markets slide

S&P 500 hits lowest level in 20 months

U.S. President Donald Trump expressed confidence on Tuesday in Treasury Secretary Steven Mnuchin, who is struggling to contain his first real crisis but has failed to assuage investors unnerved by turmoil in Washington.

Trump told reporters at the White House on Christmas morning that Mnuchin is a “very talented guy, very smart person.” He complained again about the Federal Reserve and its chair, Jerome Powell, saying that “they’re raising interest rates too fast.” After weeks of sliding stock prices, Mnuchin convened an emergency meeting with top U.S. financial regulators on Monday, following a call with executives from six major banks the previous day. The Treasury Department issued a statement Sunday saying banks have adequate liquidity for lending, surprising investors who didn’t know that might be an issue.

After Mnuchin’s call on Monday — which produced no public statement — stocks continued their Christmas Eve slide, ending the day with the benchmark S&P 500 down 2.7 per cent, hitting its lowest level in 20 months.

Last week in an interview with Bloomberg News, Mnuchin pointed to long-standing phenomena to explain the stock market’s recently volatility. He cited five-year-old restrictions on banks using their own capital to make speculative market bets, known as the Volcker Rule. He also mentioned highfrequency trading, an industry practice that has been common for more than a decade.