Former Treasury Secretary Steven Mnuchin said on Wednesday that the market may be “overreacting a bit” to policies rolled out by the new Trump administration — and that he doesn’t think there will be a recession.
“I don’t think the outlook looks like we’re going to have a recession,” said Mnuchin on CNBC’s “Squawk Box” when addressing recession fears and the recent stock market decline. “I don’t think anybody should look at what’s a natural, healthy correction of these indexes as indicating that the economy’s in trouble.”
“The president has always believed in adding tariffs, so I think that’s what we’re seeing in the market today,” he added.
His comments come amid growing concerns over trade tensions and economic uncertainty brought on by President Donald Trump’s shifting tariff policy.
Over the past two months, confidence has declined among consumers and small business owners, while the Federal Reserve Bank of Atlanta’s GDPNow tracker predicts a contraction in the first quarter. Stock markets have also seen more volatility as the S&P 500 fell 9.4% from its peak in mid-February, and the Nasdaq Composite erased all postelection gains and tumbled below November 2024 levels.
Mnuchin is now running Liberty Strategic Capital and said he won’t be joining Trump’s cabinet again, but the current recession scare over Trump 2.0 may be making people nostalgic for him.
Business Insider’s Emily Stewart points out that Mnuchin was the Wall Street whisperer and a force of reassurance during the first Trump administration, who was credited for keeping people calm about the debt ceiling and for striking a deal with Congress to deliver much-needed economic relief during COVID.
Stewart wrote:
With the markets currently in meltdown mode, largely thanks to Trump, Mnuchin (or a Mnuchin type) is someone many on Wall Street would very much like to have back. They’d like a Mnuchin-esque Money Dad to come tuck them in at night and tell them not to worry about big bad tariffs or a potential recession hiding underneath the bed. In the absence of such a figure, investors are facing a Trump 2.0 who isn’t as concerned about their feelings — or, more importantly, holdings — as they’d hoped.
Trump addressed tariffs on Tuesday at a regular meeting of the Business Roundtable, a nonpartisan Washington-based economic advocacy group comprising more than 200 CEOs, like Apple’s Tim Cook and JPMorgan Chase boss Jamie Dimon. He said that “hundred of billions of dollars are being invested” because factories are moving back to the US, and warned that tariffs “may go up.”
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