The US Secretary of the Treasury Steven Mnuchin considers that currency issues must be part of the US-China trade talks. He expressed concerns about the weakening of the Chinese yuan.
Steven Mnuchin also said that China needs to establish concrete “list of action” in order to rebalance trade relations between the two countries.
The US Secretary of the Treasury and the governor of the People’s Bank of China, Yi Gang, have discussed extensively the issues of the currency of the two countries at the annual meetings of the International Monetary Fund (IMF) and the World Bank in Bali, Indonesia.
“I expressed my concern about the weakness of the currency (yuan), and that the currency should be part of every trade discussion”, said Steven Mnuchin. The finance minister commented on the global capital market declines, calling them “natural correction”.
“Markets tend to go far in both directions”, said Steven Mnuchin, adding that the US economy is positively developing and inflation is under control. “The fundamentals are still very strong”, added he.
In Steven Mnuchin’s words, the Fed did not suffer from Trump’s comments. “The President was clear. He likes low interest rates”, said the US Finance Minister, emphasizing that the White House respected the independence of the central bank. “The president is worried that the Fed is raising interest rates too much and slowing the economy. And, of course, these are normal fears”, added Steven Mnuchin.
In his words, the Fed Governor Jerome Powell does “good work” and “understands the regulatory environment” around the financial industry.
In 2018, the Fed raised interest rates three times by 0.25 percentage points – in March, June and September, reaching a range of 2% to 2.25%.