Tag Archives: Steve Mnuchin

Christmas Eve Trading in 2018 Worst in US History

The Dow Jones plunged 640 points on Monday, December 24 during shorter than normal hours due to the Christmas holiday. The sell-off was prompted by an unstable White House which reacted poorly to one of the worst trading weeks in ten years.


The S&P 500, NASDAQ and the Dow Jones all fell at least 2.2%, but the Dow Jones Industrial Average lost 2.85%, 640 points. These numbers declare the historic, harrowing losses experienced on Christmas Eve, pushing the stock market for a yearly decline of about 11%. If the year ends with such a decline it will be the worst year since the beginning of the financial crisis.


Investors are struggling to understand the forces that prompted the retreat, speculating on several possibilities all coming together to sow chaos and concern.


Treasury Secretary Steve Mnuchin called on six bank CEOs to try and reassure them and fragile financial markets after an historically poor week. It was a highly unusual move, which only made matters worse.


There is concern that President Trump is seeking to fire Federal Reserve head Jerome Powell. Trump is angry that the Fed has raised interest rates four times already and inquired of his aids if he had the authority to fire the Chairman of the independent Federal Reserve.


This might just be the end of the decade-long bull market which was helped to a great extent by loose monetary policy. From the 2009 low to the high of this past September, US stocks have climbed by 280%. But global growth is losing some steam, a trade war with China and others, and interventionist Fed policy are all coming together to accompany a new kind of stock market.


“Markets still under pressure from last week’s more hawkish Fed update, exacerbating fears about slowing growth and more expensive refinancing following years of stimulus,” said Michael van Dulken, the head of research at Accendo Markets.

G20 Avoiding Commitment to Strong Free Trade Endorsements

Steven Mnuchin’s Official Portrait as the 77th U.S. Secretary of the Treasury.

US finance officials attending the G20 summit in Baden-Baden, Germany, refrained from signing a document committing the US to free trade as a policy. The refusal is a 180-degree departure from a decade-old policy of supporting free trade. The non-move stymied the chance of any deal from being forged. US intervention also led to any cooperative actions from taking place to stem the tide of climate change.

The talks between the world’s 20 most important world powers, known as the G20, ended with no joint position statement that would have definitively renewed the country’s long-standing promise to develop and nurture free trade among the nations.

US Treasury Secretary Steve Mnuchin led the US delegation and its push-back against free trade. As a result, the G20 finance ministers’ statement reneged on past commitments made by the body, including an unequivocal rejection of protectionism and a strident backing of free trade.

The statement the ministers did issue was a mildly worded, non-committal statement that said that the G20 countries “are working to strengthen the contribution of trade to their economies.”
Also conspicuously missing were the usual commitments to multilateral trade systems, like the World Trade Organization (WTO).

The summit and the G20 are both an informal forum and a non-binding body of nations. Statements do not obligate any of the countries to any particular policy or practice. However, the discussions between the G20 nations and the statements they publish do have and impact on economic and financial policy in the year to come.