Mnuchin Bid to Calm Markets Risks Making Bad Situation Worse
- Looking to tamp down a liquidity crisis no one had raised
- Actions come after report Trump looks to central bank shakeup
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Treasury Secretary Steven Mnuchin looked to quash big-bank worries over plunging stock markets and reports that President Donald Trump might move on his Federal Reserve chief by assuring the financial community on Sunday that market liquidity is in good shape.
Some market participants, however, questioned why Mnuchin answered a question that no one was asking. Even after recent market losses, a liquidity squeeze or fresh financial crisis hadn’t been on the market’s mind. Mnuchin’s assertion of ample liquidity risked raising doubts.