News analysis

Mnuchin bid to calm markets risks making bad situation worse

WASHINGTON • United States Treasury Secretary Steven Mnuchin has looked to quash big-bank worries over recent plunging stock markets and reports that President Donald Trump might move on his Federal Reserve chief by reassuring the financial community on Sunday that market liquidity is in good shape.

Some market participants, however, questioned why Mr Mnuchin answered a question that no one seemed to be asking. By confirming there was ample liquidity to stave off any shocks to the system, was he suggesting that liquidity has, in fact, become an issue?

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A version of this article appeared in the print edition of The Straits Times on December 25, 2018, with the headline 'Mnuchin bid to calm markets risks making bad situation worse'. Print Edition | Subscribe