US Treasury secretary: Economy strong, stock drop a ‘natural correction’

(FILES) In this file photo taken on July 22, 2018 US Secretary of the Treasury Steven Mnuchin, gestures during a press conference in Buenos Aires, at the end of the G20 Finance Ministers and Central Bank Governors meeting. – US Treasury Secretary Steven Mnuchin warned China on October 10, 2018 against engaging in competitive currency devaluations as the two countries wage a trade war, in comments published in the Financial Times.There are several factors behind the recent fall in the Chinese yuan, or renminbi (RMB), including economic issues in China, Mnuchin he told the newspaper ahead of meetings in Bali, Indonesia of the IMF, World Bank and G20. (Photo by EITAN ABRAMOVICH / AFP)

Treasury Secretary Steven Mnuchin said Friday the US economy remains strong, and the recent decline in the stock market was “just a natural correction.”

After two days of sharp declines in US and global stock markets over fears of rising interest rates and the US trade conflicts, Mnuchin said in an interview on CNBC that markets “tend to go too far in both directions” and will have natural corrections.

But he said it was a “good thing” that Wall Street as poised to recover on Friday. He was speaking on the sidelines of the International Monetary Fund annual meeting in Bali, Indonesia.

Mnuchin also downplayed concerns about President Donald Trump’s repeated and aggressive attacks on the US Federal Reserve this week, saying Trump “respects the independence of the Fed.”

Trump said the Fed had “gone crazy” and was being “too aggressive in raising rates,” blaming the institution for the market declines that saw the benchmark Dow Jones Industrial Average lose nearly 1,400 points in two days.

“The president’s been clear. He likes low interest rates. I think that’s really what it was about,” Mnuchin said, adding that Fed chair Jerome Powell is “doing a good job.”

“I think the fundamentals are still very strong. The US economy is strong, US earnings are strong. So I see this as just a natural correction after the markets were up a lot.”

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