Mulvaney and Mnuchin backtrack
Reports saying that Trump had mulled firing Jerome Powell several times this week sparked worry about a further dramatic selloff in markets.
So in an extraordinary Saturday statement -- one surely rushed to get out ahead of markets reopening -- Mnuchin walked it back via twitter.
"I have spoken with the President @realDonaldTrump and he said "I totally disagree with Fed policy. I think the increasing of interest rates and the shrinking of the Fed portfolio is an absolute terrible thing to do at this time especially in light of my major trade negotiations which are ongoing, but I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so."
White House budget director Mick Mulvaney, who is set to become the chief of staff, went a step further in a TV appearance, saying that Trump doesn't believe he has the authority to fire Powell.
Despite the walk-back and the holidays, it should be an interesting week.
Update: Early indication put USD/JPY down 20-40 pips.
