Former US treasury secretary plays down recession fears, calls stock market pullback a natural phenomenon

Former U.S. Treasury Secretary Steven Mnuchin has played down the risk of a U.S. recession and downplayed the current sell-off in the stock market as an adjustment to President Donald Trump's aggressive trade strategy. ‘We came into the market fully priced in, so I think a 5 per cent to 10 per cent correction in the S&P or the Nasdaq is actually reasonable,’ Nuchin said in an interview on Thursday. ‘The market has really been driven by a lot of tech spending, particularly on artificial intelligence - so that's a natural adjustment in the market to some extent,’ Nuchen said, adding that ’some of that is the market's concern about tariffs and their impacts of concerns about tariffs and their impact.’ He advised investors not to ‘overreact’. ‘I don't think we're going into a recession at all,’ he said. ‘There may be a slight slowdown in the economy as we scale back government spending, but I don't think investors should worry about a recession.’ He added that the biggest concern at the moment is the large US deficit and called on Republicans to extend Trump's 2017 tax cuts to reduce the impact on borrowing.