Mnuchin Blames Trump Tariffs for Market Volatility, Assures No Recession

U.S. Treasury Secretary Steven Mnuchin has addressed the recent market volatility, attributing the stock market decline to a "short-term" reaction to President Trump's newly announced tariff policies. Mnuchin expressed confidence that these tariffs would not lead to an economic recession, despite the market's negative response this week. He emphasized that the stock market is a long-term investment and that the current fluctuations are part of its natural volatility.

Mnuchin's remarks came during an interview with a local news program, where he also discussed the administration's long-term economic goals. He stated that the focus is on building a strong economic foundation for sustained prosperity, rather than reacting to short-term market movements. Mnuchin also noted that the previous administration had pushed the country towards a financial crisis, implying that the current policies are aimed at preventing such an outcome.

When asked about the duration of the economic uncertainty and the need for the public to endure it, Mnuchin reiterated the administration's commitment to implementing tariffs and reducing inflation. However, he did not provide a specific timeline for these efforts. This lack of clarity has raised concerns among some analysts and investors, who worry about the potential long-term impact of the tariff policies on the economy.

Meanwhile, Kevin Hassett, the Chairman of the White House National Economic Council, also defended the tariff policies. He argued that the tariffs would not significantly increase costs for American consumers, as many countries have expressed interest in negotiating with the U.S. Hassett acknowledged that the tariffs could lead to a slight increase in the Consumer Price Index (CPI), but he assured that the Federal Reserve would not be influenced by political pressures.

Hassett's comments came as part of a broader effort by the administration to reassure the public and the markets about the economic impact of the tariff policies. However, some critics have expressed skepticism about the administration's claims, pointing to the potential for increased inflation and economic instability. The administration's economic advisors have also faced criticism for their handling of the tariff policies, with some reports suggesting that Mnuchin is considering resigning due to his dissatisfaction with the administration's approach.

Despite the administration's efforts to downplay the economic impact of the tariff policies, recent polls have shown a shift in public opinion. A significant portion of the electorate now expresses concern about the potential for economic downturn and inflation, with many blaming the tariff policies for these fears. This shift in public sentiment could have implications for the administration's economic agenda and its ability to implement its policies in the face of growing opposition.