updated at 4:01 pm ET
When it comes to the stock market, the Trump administration has suddenly entered a quiet period.
The president, who frequently boasted when the stock market was hitting record highs, has said nothing about the market’s stomach-churning gyrations in the past few days. The Dow Jones Industrial average lost a total of 7 percent on Friday and Monday, before bouncing back on Tuesday with a gain of more than 2 percent. The S&P 500 and Nasdaq experienced similar swings.
Treasury Secretary Steven Mnuchin avoided the subject in prepared remarks to the House Financial Services Committee. When pressed, Mnuchin told lawmakers that the market is not cause for concern.
“First I would say, we are very focused on the long-term economic growth and we believe that the policies that we’ve enacted, including tax reform, are very positive for long-term economic growth,” Mnuchin told lawmakers. “The stock market is up significantly — over 30 percent — since President Trump was elected. We’re monitoring the stock markets. They’re functioning very well.”
White House press secretary Sarah Huckabee Sanders also tried to redirect the conversation after the Dow plunged 1,175 points on Monday.
“The economy is incredibly strong right now. The president’s focus continues to be on the long-term economic fundamentals,” Sanders told reporters Tuesday. She pointed to last week’s jobs report, which showed unemployment hovering at a 17-year low and wages growing at their fastest pace since 2009. “There’s nothing that’s taken place over the last couple of days in our economy that’s fundamentally different than it was two weeks ago and we’re very comfortable with where we are right now.”
The official silence on the stock market would have been the norm in any previous administration. But it marks a departure for Trump and his team. The president has not been shy about claiming credit as the market climbed thousands of points in the past 15 months.
“The stock market has smashed one record after another, gaining $8 trillion and more in value in just this short period of time,” Trump boasted during last week’s State of the Union address. “The great news for Americans’ 401(k), retirement, pension and college savings accounts have gone through the roof.”
At a factory tour in Pennsylvania last month, Trump kidded workers about the stock gains in their retirement plans.
“You’re brilliant investors,” the president said. “I’ve had people come up, ‘Sir, my wife thinks I’m the most brilliant investor because I made 42 percent in the last 10 months.’ And that’s pretty good.”
There was no such talk of retirement gains on Monday, when Trump visited another factory. His speech to workers in Ohio was juxtaposed with the biggest one-day point drop in stock market history. (In percentage terms, Monday’s plunge was far from a record.)
It’s not as if stock market volatility is a surprise, even if the steady gains of the last year had lulled many market watchers into a false sense of complacency. Many observers warned for months that Trump’s celebratory tone could backfire when — not if — the market inevitably suffered a downturn.
“Now that Trump has eagerly claimed credit for instilling investor confidence and driving share prices to fresh highs, he stands to take the blame if markets hit a rough patch and decline,” cautioned Ben White in Politico. That was in August of last year, when the Dow had just crossed 22,000.
“Everybody’s got to remember that the markets go up and the markets go down,” said former Obama White House economist Austan Goolsbee in an interview with Morning Edition on Tuesday. “On average, they tend to go up, but there’s a lot of volatility.”
Trump himself was wary about that in his private life. He told Fox Business News in 2016, “I’ve never been a big investor in the stock market.”
Stocks and mutual funds accounted for a small fraction of the real estate mogul’s personal fortune. According to a spokesman, Trump liquidated his stock holdings in the summer of 2016.
That puts him in good company. Nearly half of all Americans don’t own any stock. And stock ownership is heavily concentrated among the wealthy.
That is another reason many presidents avoid talking too much about the market. It’s simply not the most important indicator to many of their constituents, who are likely to be more interested in what is happening with jobs and wages.
The recent stock market sell-off was sparked in part by last week’s news that average hourly wages rose 2.9 percent in the last 12 months — the biggest jump in nearly eight years. Nervous investors worry about what that means for inflation and interest rates. To average workers, though, it just means more money in their paychecks.
“We saw a decent jobs number this last [week]. And we have seen in the last couple of years wages starting to inch themselves upwards,” said Goolsbee, a University of Chicago economist who served as adviser to former President Barack Obama. “So what happens in the stock market does not have to be an indicator for what’s happening to everyday people in the economy.”