Donald Trump’s Treasury secretary is seeking to calm stock market investors. They are nervous due to the chaos in Washington that has been caused by his boss. The president shut down key parts of the government, fired the Defense Secretary, and withdrew U.S. troops from Syria without consulting anyone. And then he threatened to fire the Chairman of the Federal Reserve, which would be a disaster and lead to more stock market losses.
With all of this going on, Treasury Secretary Steven Mnuchin has put together something called the “plunge protection team.” He also called the CEO’s of the six largest banks in the country and inquired into their overall strength and liquidity.
Mnuchin called the banks on Sunday, speaking to the heads of Bank of America, Citi, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo.
On Monday, Mnuchin will convene the president’s working group on financial markets, often called “plunge protection team” which also met in 2009 during the last financial crisis. This team includes Jerome Powell, the chairman of the Federal Reserve, and the head of the Securities and Exchange Commission.
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The stock markets took a dive last week, which was their worst in ten years. They are also on track to have the worst performing December since 1931, during the Great Depression.
In addition to the chaos Trump has created, investors are worried about the trade war between the United States and China, and the recent increases in interest rates. There is a belief that while the global economy is struggling, political instability in the United States will cause many more problems.
Ultimately there is a fear of a global recession, and it is to calm these fears that Mnuchin has taken the very unusual steps of calling banks and holding a meeting of top U.S. financial officials.
On Monday Asian stock markets were calm, having stopped their steep declines from last week. It is hoped that this week will also bring more calm to Wall Street. But nothing is assured.
Stock markets hate uncertainty, but Donald Trump loves to keep everyone guessing about his next moves. Stock markets hate chaos, but Donald Trump thrives on it.
Mnuchin’s steps may not be enough to stop market declines because investors know that the man in the Oval Office is still in charge. There is still a government shutdown. There is still no permanent Defense Secretary, Attorney General, or White House Chief of Staff.
Donald Trump continues posting unhinged tweets while the rest of the world nervously awaits his next moves. What he is doing is not healthy for the global economy or global political stability. It is time for a new person in charge. It is time for Donald Trump to leave the White House.
I am a lifelong Democrat with a passion for social justice and progressive issues. I have degrees in writing, economics and law from the University of Iowa.
