U.S. Treasury Secretary Steven Mnuchin on Tuesday played down worries about a selloff in U.S. and global stock markets, saying that recent volatility was not enough to rock market fundamentals.
World stock markets fell for a fourth straight day on investor concerns about the prospect of higher interest rates and stretched equity valuations. U.S. stocks were last slightly lower in volatile trade.
“I am not overly concerned about the market volatility. I think the fundamentals are quite strong,” Mnuchin told lawmakers during a scheduled hearing on Capitol Hill.
“I think you’ve seen a normal market correction, although large,” he said, adding that the move did not raise any financial stability concerns. At its session low on Tuesday, the S&P 500 had declined 9.7 percent from its Jan. 26 record high.
Mnuchin said that the stock market was still up significantly since U.S. President Donald Trump’s election victory and that the administration was focused on long-term economic growth.
He also urged U.S. lawmakers to raise the nation’s debt ceiling but declined to comment on whether that should happen this week as part of a broader agreement that would avert a rerun of January’s three-day partial government shutdown.
Last week Mnuchin called on the Republican-controlled Congress to lift the federal debt limit “as soon as possible” so the government could pay employee benefits and other obligations.
In a letter to congressional leaders last week, Mnuchin said the Treasury Department would continue to suspend payments into federal employee retiree, health and disability funds through Feb. 28.
Congress must raise the debt ceiling to avoid a government default. The nonpartisan Congressional Budget Office last Wednesday estimated that the U.S. Treasury would exhaust its borrowing options in the first half of March.
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