Steven Mnuchin calls bank CEOs after Fed interest hike

Marco Green
December 24, 2018

In early trading, the benchmark S&P 500's e-mini futures contract was off by about a quarter of a per cent.

Worries about slowing economic growth and rising interest rates saddled the US market with its worst week in more than seven years.

Treasury Secretary Steven Mnuchin phoned the heads of the largest U.S. banks on Sunday to make sure they had enough cash in expectation of a jittery market opening on Wall Street.

The group, which includes the Fed board of governors, the head of the SEC, and the Commodities Futures Trading Commission, also convened during the 2009 financial crisis - although Mnuchin provided weekend assurances that the US maintains 'strong economic growth'.

Secretary Mnuchin conducted a series of calls today with the CEOs of the nations six largest banks: Brian Moynihan, Bank of America; Michael Corbat, Citi; David Solomon, Goldman Sachs; Jamie Dimon, JP Morgan Chase, James Gorman, Morgan Stanley; Tim Sloan, Wells Fargo.

"The [bank's chief executives] confirmed that they have ample liquidity available for lending to consumer, business markets, and all other market operations", the Treasury said in a statement attached to a tweet from Mr Mnuchin. Among theme are interest rate hikes, the trade war with China, the government shutdown amid a standoff over Trump's border wall, and chaos in the White House amid the the Mueller probe and the coming Democratic House takeover.

In addition, a partial USA government shutdown began at midnight on Friday after opposition Democrats resisted President Donald Trump's demand for $5bn (£4bn) for his Mexico border wall.

Wall Street is also closely following reports that Mr Trump has privately discussed the possibility of firing Federal Reserve chairman Jerome Powell.

Trump has criticized the US central bank for raising interest rates this year, which could further dampen economic growth. The Federal Reserve's independence is seen as a pillar of the USA financial system.

In December alone, the S&P 500.SPX is down almost 12.5 percent, while the Nasdaq Composite.IXIC has slumped 13.6 percent. Barring a turnaround, stocks are now headed for their single worst month since October 2008, when the market was being battered by the global financial crisis. The last time that happened was in November 2008. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

Other reports by Click Lancashire

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