White House Economic Adviser Claims Fed Chief's Job Is Safe

Steven Mnuchin

Steven Mnuchin

Asked on Boxing Day if Fed chairman Jerome Powell's job was safe, economic advisor Kevin Hassett said to reporters: "Yes, of course, 100 per cent".

According to news reports, Trump is angry about the interest rate hike ordered by the Fed last week and had been considering whether to fire Powell, although Treasury Secretary Steven Mnuchin said on the weekend that the Fed chief would remain in his post.

The Fed hiked interest rates again last week, as had been widely expected. Further declines in stock futures yesterday in Asia suggested that the benchmark for American equities was nearing a bear market until it turned around, as USA markets were poised to open.

The stock market malaise comes with Mr Trump refusing to sign a budget bill to keep the government funded as he demands money for a US-Mexico border wall.

On Tuesday, Trump praised USA companies and said their lower stock prices present an opportunity for investors.

On Monday, December 24, all three major stock market indices smashed the old records for declines on Christmas Eve.

In a subsequent press conference, responding to questions about Trump's criticism, Powell said: "Political considerations play no role in our decisions about monetary policy. The Fed is like a powerful golfer who can't score because he has no touch - he can't putt!"

Before Tuesday's comments, one person familiar with the President's thinking said Mr Trump had also weighed dismissing Mr Mnuchin, while another said Mr Mnuchin's tenure may depend in part on how much markets continue to drop.

"Secretary Mnuchin talks to bankers all the time, practically every day and you know, the markets clearly are focused on downside risk for next year and it's important to gather information from the normal sources and from informal sources and you know", Hassett said.

That assurance followed Hassett's appearance on Fox Business, where the head of Trump's Council of Economic Advisers said he is highly confident that the president is happy with Mnuchin. The Treasury secretary spoke to the chief executives of six of the nation's largest banks on Sunday, and released a statement that afternoon saying all had "ample liquidity". We have companies, the greatest in the world, and they're doing really well. He has been working to calm the markets over that time.

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