Treasury Secretary Steven Mnuchin attempted early Thursday to steer clear of his boss’s harsh criticism of the Federal Reserve for a role in a midweek rout that handed U.S. stocks their biggest drop since February and triggered an equities retreat around the globe.
“I don’t think there was any new news that came out of the Fed today that wasn’t there beforehand,” Mnuchin said from the sidelines of an International Monetary Fund meeting of global finance officials and central bankers in Indonesia, according to CNN.
On Thursday, President Trump attacked the Fed for a third straight day, calling the central bank “cute” for its recent interest-rate hikes. That follows comments at an evening campaign rally in which Trump called the central bank “crazy” for its current policy tack.
Read: Trump calls Fed ‘too cute’ in third straight day of criticism
“Markets go up. Markets go down,” Mnuchin said, according to the report. “I see this as a normal correction.” He said solid U.S. economic fundamentals provide some cover.
Stocks SPX, -0.53% opened lower again Thursday, although so far were in a more measured retreat than a day earlier.
Some analysts argue the Fed’s expected rate path is overly aggressive, while others contend strong underlying economic fundamentals justify the central bank’s attempts to continue to remove the easy monetary policy that followed the financial crisis.
The Fed has already increased rates three times in 2018 and is expected to lift benchmark rates a fourth time in December, as well as continue its gradual tightening trend in 2019, according to the Fed’s own forecasts.
Stock markets have been rattled in part by reaction to rising bond market yields, meaning steeper borrowing costs for businesses, as fixed-income investors adjust to a higher interest-rate climate. A bond-market selloff drove the yield on the 10-year U.S. Treasury TMUBMUSD10Y, +0.06% above 3.26% earlier this week for the first time since April 2011. Yields had stabilized somewhat by Thursday.
Check out: What Trump’s tirade against ‘loco’ Fed means for the markets
