The United States treasury secretary has on Monday, called the chief executive officers (CEOs) of six biggest banks of the U.S. and organized plans to summon a "plunge protection team", amid the USA government partial shutdown.
Technology companies, health care stocks and banks took some of the heaviest losses in the broad sell-off, which followed news that the U.S. Treasury Secretary called the CEOs of six major banks Sunday in an apparent attempt to stabilize jittery markets.
Gilani told Cheddar that Trump's scrutiny of the Fed has likely contributed to market upset over the last raise hike.
The S&P 500 ended down about 19.8 percent from its September 20 closing high, just shy of the 20 percent threshold that commonly defines a bear market.
Sarah Binder, a professor of political science at George Washington University and co-author of "The Myth of Independence: How Congress Governs the Federal Reserve", said it's an open legal question on whether the president can actually fire a Fed chair for anything other than breaking the law or serious misconduct.
While economic indicators suggest the world is in the midst of a significant slowdown, much of the turbulence in markets this month appeared to stem from tumbling confidence in policy makers.
The six CEOs who spoke individually by phone with Mnuchin were "totally baffled" and found the encounters puzzling and largely unnecessary, a person familiar with the calls told CNN.
Mnuchin Tries to Soothe Investor Worries......
Then on Monday, Mnuchin held the hastily organized call with the President's Working Group, a roster of top US financial regulators, who assured him they are seeing nothing out of the ordinary in markets. "So I think it's a tremendous opportunity to buy", Trump said after speaking with U.S. troops deployed overseas via video conference. While many investors were bearish on some sectors of the economy, there was no widespread concern that the markets were NOT functioning correctly, or that there was trouble looming in the banking sector.
USA stocks have fallen sharply in recent weeks on concerns over slowing economic growth, with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression.
"But I think they will get it pretty soon", added the president, who has dubbed the supposedly independent central bank "crazy" and "out of control".
The source said Mnuchin's aides have been trying to calm Trump while their boss is celebrating the holiday in Cabo San Lucas, Mexico after he cancelled his own family plans at his Mar-a-Lago estate in Florida. 'Up 'til now, he's been protected by the fact that Trump liked him and he's been a loyalist'. "He had a really low interest rate".
An insider had previously claimed Trump was upset over Mnuchin's recommendation to hire Federal Reserve Chairman Jerome Powell.
A bruising December for the USA markets - triggered by concerns over a partial federal government shutdown, the U.S. Defense Secretary Jim Mattis' resignation on Thursday after Trump's surprise decision to pull US troops out of Syria also unsettled investors.
Instead of assuaging their concerns, Mnuchin's message further unnerved Wall Street.
"It seems unexpected, abrupt and unnecessary", said Michael Purves, chief global strategist at Weeden & Co in Greenwich, Connecticut.