Imagine having a runny nose, itchy eyes, congestion, and a sore throat, and your doctor telling you that you shouldn’t worry about cancer—she consulted her colleagues and they’re certain it is not cancer, and if it were, they could fight it.
This is roughly what happened on Sunday evening, when Treasury Secretary Steven Mnuchin put out a press release on calls he held with executives from the country’s largest banks. Mnuchin’s statement assured the public that they had not been having liquidity problems or “clearance or margin” issues—the sorts of things you would worry about if the country were on the brink of a financial crisis.
The markets have been suffering from something like a nasty cold of late, with a major correction in stock prices due to rising interest rates, trade tensions, the government shutdown, and slowing global growth. But the surprise holiday readout, which came with a heads-up that Mnuchin would be holding a call with some of the country’s top financial regulators as well, unnerved and puzzled investors, bank executives, politicians, and economists. What was the Treasury secretary thinking? Who thought we were tipping into a financial panic? None of the possible explanations are very reassuring, though it seems that Mnuchin was trying to be.
More at link.
Link: https://www.theatlantic.com/ideas/archive/2018/12/whats-behind-steve-mnuchins-press-release/578968/