Trump praises Mnuchin but hits Fed again on rate rises

WASHINGTON (Reuters) - President Donald Trump on Tuesday expressed confidence in Treasury Secretary Steven Mnuchin amid worries over a weakening economy and a stock market slump, but repeated his criticism of the U.S. Federal Reserve, saying it has raised interest rates too quickly.

Speaking to reporters in the Oval Office after a Christmas video conference with U.S. troops deployed abroad, Trump also said U.S. companies were "the greatest in the world" and presented a "tremendous" buying opportunity.

Asked if he has confidence in Mnuchin, Trump said: "Yes, I do. Very talented guy. Very smart person," he said. His comments came after Mnuchin on Monday held a conference call with U.S. regulators to discuss plunging U.S. stock markets.

The call did more to rattle markets than to assure them. All three major U.S. stock indexes ended down more than 2 percent on the day before the Christmas holiday. The S&P 500 has lost about 19.8 percent from its Sept. 20 closing high, just shy of the 20 percent threshold that commonly defines a bear market.

Mnuchin also spoke on Sunday with the heads of the six largest U.S. banks, who confirmed they have enough liquidity to continue lending and that "the markets continue to function properly."

9 PHOTOS
Treasury Secretary Steven Mnuchin
See Gallery
Treasury Secretary Steven Mnuchin

Steven Mnuchin, President-elect Trump's nominee for Treasury secretary, testifies during his Senate Finance Committee confirmation hearing in Dirksen Building, January 19, 2017.

(Photo By Tom Williams/CQ Roll Call)

Treasury Secretary nominee Steven Mnuchin sits with Vanessa Trump (R), wife of Donald Trump Jr, before a swearing-in ceremony for senior staff at the White House in Washington, DC January 22, 2017.

(REUTERS/Carlos Barria)

Incoming Trump administration Treasury Secretary nominee Steven Mnuchin departs after working a simulated crisis scenario during transition meetings at the Eisenhower Executive Office Building at the White House in Washington, U.S. January 13, 2017.

(REUTERS/Jonathan Ernst)

Producer Steve Bing (L) and Honoree Steven Mnuchin recipient of the Philanthropic Leadership Award attend The Kaleidoscope Ball - Designing The Future benefitting the UCLA Children's Discovery and Innovation Institute at Mattel Children's Hospital UCLA at Beverly Hills Hotel on April 17, 2013 in Beverly Hills, California.

(Photo by Jason Merritt/Getty Images for BWR)

Steven Mnuchin, Treasury secretary nominee for U.S. President Donald Trump, right, attends a swearing in ceremony of White House senior staff in the East Room of the White House in Washington, D.C., U.S., on Sunday, Jan. 22, 2017. Trump today mocked protesters who gathered for large demonstrations across the U.S. and the world on Saturday to signal discontent with his leadership, but later offered a more conciliatory tone, saying he recognized such marches as a hallmark of our democracy.

(Andrew Harrer/Bloomberg via Getty Images)

 Steve Mnuchin and Lousie Linton arrive at the Premiere of Warner Bros. Pictures' 'Jupiter Ascending' at TCL Chinese Theatre on February 2, 2015 in Hollywood, California.

(Photo by Frazer Harrison/Getty Images)

Heather Mnuchin and Steve Mnuchin attend The Art Show Gala to Benefit The Henry Street Settlement at The Seventh Regiment Armory on February 23, 2005 in New York City.

(Photo by Joe Schildhorn/Patrick McMullan via Getty Images)

Treasury Secretary nominee Steven Mnuchin attends the inaugural parade of U.S. President Donald Trump in Washington, January 20, 2017. Donald Trump was sworn in earlier as the 45th President of the United States.

(REUTERS/Lucas Jackson)

Donald Trumps' Treasury Secretary Steven Mnuchin arrives on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States.

(Photo by Win McNamee/Getty Images)

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Investors said his move to convene a call with the president's Working Group on Financial Markets, known as the "Plunge Protection team," may have weighed on sentiment.

On Tuesday, Trump praised U.S. companies and said their lower stock prices present an opportunity for investors. "I have great confidence in our companies. We have companies, the greatest in the world, and they're doing really well. They have record kinds of numbers. So I think it's a tremendous opportunity to buy."

U.S. stocks have dropped sharply in recent weeks on concerns over weaker economic growth. Trump has largely laid the blame for economic headwinds on the Fed, openly criticizing its chairman, Jerome Powell, whom he appointed.

"They're raising interest rates too fast because they think the economy is so good. But I think that they will get it pretty soon," Trump said, repeating his criticism.

Media reports have suggested Trump has gone as far as discussing firing Powell, and he told Reuters in August that he was "not thrilled" with the chairman.

On Monday, Trump said "The only problem our economy has is the Fed."

The Fed hiked interest rates again last week, as had been widely expected.

(Reporting by Makini Brice; Writing by Humeyra Pamuk; Editing by Dan Grebler)

Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.