Treasury chief: "We'll still claim credit" for stock gains
Perhaps more than any president in American history, Donald Trump has explicitly hitched his administration's performance to that of the U.S. stock market, often tweeting about his bullish impact on Wall Street and the broader economy.
With Mr. Trump yet to weigh in on yesterday's record-setting market rout, lawmakers questioned Treasury Secretary Steven Mnuchin about the sharp reversal in stocks. Appearing Tuesday before the House Financial Services Committee, Mnuchin acknowledged the market had turned volatile, saying, "I normally would not be looking at my iPhone."
But Mnuchin also sought to downplay the market downturn, saying it would be a mistake to make too much of short-term declines, "especially given how much the market has rallied" previously.
"The fundamentals are quite strong -- you've seen a normal market correction, although large," he said.
Unprecedented success for our Country, in so many ways, since the Election. Record Stock Market, Strong on Military, Crime, Borders, & ISIS, Judicial Strength & Numbers, Lowest Unemployment for Women & ALL, Massive Tax Cuts, end of Individual Mandate - and so much more. Big 2018!
— Donald J. Trump (@realDonaldTrump) January 20, 2018
“President Trump is not getting the credit he deserves for the economy. Tax Cut bonuses to more than 2,000,000 workers. Most explosive Stock Market rally that we’ve seen in modern times. 18,000 to 26,000 from Election, and grounded in profitability and growth. All Trump, not 0...
— Donald J. Trump (@realDonaldTrump) January 14, 2018
Dow goes from 18,589 on November 9, 2016, to 25,075 today, for a new all-time Record. Jumped 1000 points in last 5 weeks, Record fastest 1000 point move in history. This is all about the Make America Great Again agenda! Jobs, Jobs, Jobs. Six trillion dollars in value created!
— Donald J. Trump (@realDonaldTrump) January 5, 2018
Asked whether the Trump administration would stop tying the market to its accomplishments in light of the recent drop, Mnuchin said: "We'll still claim credit for the fact it's up more than 30 percent since the election."
In an appeal for calm, Mnuchin told the panel that he had checked in with market participants Tuesday morning and received assurances that there are no deeper systemic problems roiling stocks.
"We are very focused on long-term economic growth, and we believe the policies we've enacted" are already being seen in market gains since President Trump's election, Mnuchin said.
Even if financial markets do stabilize, as they did in Tuesday trading, they face other political headwinds. In the near-term, that includes the risk of another government shutdown later this week. Under a short-term spending bill passed in January that ended a weekend-long closure, the government will shut down again unless lawmakers can agree on another funding measure.
"U.S. political confusion remains a market risk," said Robert Doll, chief equity strategist at Nuveen Asset Management," in a client note. "President Trump's State of the Union address was noted for its calm tone, but no new policies were outlined in any detail. Investor attention is focused on this week's expiration of the current continuing budget resolution and the likelihood of further showdowns."
"I think Congress should raise the debt ceiling," Mnuchin said of the scenario that could come into play just before midnight Thursday if Congress fails to pass a spending bill.
On Tuesday, analysts at Heights Securities put the odds of another shutdown at 65 percent.