Former Treasury Secretary Downplays Economic Recession Concerns, Calls Stock Market Pullback a Natural Phenomenon

March 14: Former U.S. Treasury Secretary Mnuchin downplayed the risk of a U.S. economic recession and played down the current stock market sell-off, viewing it as an adjustment in response to U.S. President Trump's aggressive trade policy. Mnuchin stated in an interview on Thursday, "We entered the market when it was already fully priced. Therefore, I think a 5% to 10% adjustment in the S&P index or Nasdaq index is actually reasonable." "The market has indeed been driven by a significant amount of tech spending, particularly in artificial intelligence. To a certain extent, this is a natural adjustment in the market," Mnuchin said. "Some of it is the market's concern about tariffs and their implications." He advised investors not to "overreact." He said, "I don't think we will enter a recession at all. As we reduce government spending, the economy may slow down slightly, but I don't think investors should be worried about an economic recession." He also mentioned that the current biggest concern is the U.S.'s substantial fiscal deficit and called on Republicans to extend Trump's 2017 tax cuts to mitigate the impact on borrowing. (FXStreet)