Mnuchin: Market Response on Fed Rate Migration "Fully Overblown"
Treasury Secretary Steven Mnuchin told FOX Business that the market's sales point in response to the Federal Reserve's rate hike decision was "completely overblown."
"I think the market was disappointed in the chairman's comments," he said during an exclusive interview with Stuart Varney on Thursday. "But I would say that if you look at the details, you can not just look at the headline, there were two speed counts, you must actually look at seventeen points on the spot." The dot plot is a chart that Fed uses to convey the expectations of the federal fund price.
The Federal Reserve raised the central rate a quarter on Wednesday, as expected, and said that they only expect two hikes next year, down from the three expected.
In Mnuchin's opinion, the data showed more politicians favored a slower pace of interest rates.
"So each of the governors and the people in the committee put their views. If you look at this, the high end of the series is significantly down, and it is still quite wide spread," he says. "So there are obviously people on committee that does not believe that they need to raise prices much here. "
With Dow and S & P 500 at a pace for the worst December since 1[ads1]931 and with many stocks that hit 52-week downs, Mnuchin made him feel "US stocks are huge value. "
More from FOX Business …
Stock markets in recent weeks of the year have come in high volatility, a pattern Mnuchin is due to algorithmic trade and the Volcker Rule. [19659002]" I believe that with the advent of computerized commerce as so much of the market now combined with the Volcker Rule, where you can not make decision makers to make capital, you only have much bigger moves in both directions, "he said." You obviously have a situation where the market has overreacted to Fed & # 39 ; s comments and you see that software stores take over. "
Mnuchin also said that Fed's decision to reduce the balance will give them more capacity in the future. [19659011]