Trump's First Treasury Secretary Mnuchin Says "Low Possibility of US Recession"

Investors Need Not Worry About a Recession
U.S. Stock Market Correction Is a Natural Trend

Steven Mnuchin, former Treasury Secretary under the first Donald Trump administration, dismissed the possibility of a U.S. economic recession on the 13th (local time) and expressed the view that the recent stock market correction is a natural occurrence.

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In an interview with Bloomberg on the same day, Mnuchin said, "I do not think at all that we will fall into a recession," adding, "While the economy may slow down slightly as the government reduces spending, I believe investors do not need to worry about a recession."

Since the Trump administration's tariff policies took full effect, concerns have arisen both inside and outside the U.S. that excessive tariff imposition could cause inflation, leading to reduced consumption and a downturn in the economy. However, Mnuchin disagreed with these concerns.

Regarding the recent stock market correction, including the S&P 500 index recording its largest weekly drop since September last year, he described it as a natural adjustment. Mnuchin evaluated, "The market had previously priced in enough, so I think it is natural for the Standard & Poor's (S&P) 500 index or the Nasdaq index to adjust by about 5 to 10% now."

Mnuchin added, "The stock market rose thanks to huge spending by tech stocks, especially companies related to artificial intelligence (AI), so some decline is a natural correction," and "there is also a part of the decline due to concerns about tariffs and their impact."

He also said that the biggest concern is the U.S. fiscal deficit and urged the Republican Party, which is focused on extending tax cuts, to take measures to reduce the impact on borrowing.

In an interview with CNBC the previous day, he also pointed out that the market is overreacting to President Donald Trump's tariff policies.

He said, "There is no sign anywhere that the U.S. economy is about to enter a recession," and "people are somewhat overreacting to policy changes following the launch of Trump's second term."