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Wall Street selloff worsens on Mnuchin move, Washington drama

29 December 2018

Over the weekend, Mnuchin sought to reassure financial markets that Powell's job is safe after the report Friday that Trump had consulted advisers many times in the previous few days about firing Powell. "In the face of a large correction in the market, there seems to be disarray and disunity and people aren't speaking with one voice, which I think is discouraging to anybody in the market". Trump has repeatedly and publicly lambasted Powell over the central bank's raising of interest rates.

Trump on Monday renewed his criticism of the Fed, however, tweeting that the central bank was the "only problem" for the USA economy.

"I am highly confident that the president is very happy with Secretary Mnuchin", Mr Hassett told Fox Business Network.

After weeks of sliding stock prices, Mnuchin convened an emergency meeting with top USA financial regulators on Monday, following a call with executives from six major banks the previous day.

But the comments were widely criticized by market watchers for raising new doubts, fears that were already brewing because of a partial USA government shutdown over Trump's battle with congressional Democrats to finance a wall on the border with Mexico.

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Erdogan added he expected to meet Russian President Vladimir Putin for face-to-face talks about the issue. This operation may lead to real Turkish control over a significant part of northern Syria.

The Dow on Monday fell 315 points, or 1.1 percent, to 22,123 in early trade, while the S&P 500 and Nadsaq both fell more than 1 percent. "But other than that, I wish everybody a very Merry Christmas", the president said as he fielded reporters' questions after talking with members of the armed forces.

"Treasury's readout is unusual, in our view, given that bank liquidity is not a risk or concern that has been raised by regulators, economists or analysts", analysts at Height Securities said in a note.

Trump has reportedly been frustrated with his Treasury secretary when the stock market wasn't doing great in recent weeks.

Mnuchin then spoke with the heads of major U.S. banks on Sunday and issued a statement that evening saying the banks had "ample liquidity".

A day later, the Dow took a nosedive of more than 650 points, the worst Christmas Eve trading day ever. Still, sources have previously told CNN that Trump was upset with Mnuchin over his advice to appoint Powell as Federal Reserve chairman.

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Last week's turmoil in Washington-which included a government shutdown that appears likely to last until at least Thursday and the abrupt resignation of Defense Secretary Jim Mattis-has spooked markets worldwide.

"Well, we'll see. They are raising interest rates too fast, that's my opinion", he said.

But he said the U.S. economy continues to be strong. Mnuchin said the CEOs all assured him they have ample money to finance their normal operations.

In a recent tweet, Trump had been quoted saying, "The only problem our economy has is the Fed".

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Wall Street selloff worsens on Mnuchin move, Washington drama