Treasury Secretary Steven Mnuchin has a degree from one of the most prestigious universities in the world (Harvard grads may dispute this); He was the CIO of Goldman Sachs; He launched a successful hedge fund; He is now Treasury Secretary. Yet he appears to barely grasp basic economic concepts (not to mention his apparent fondness for fake math).
Last night, Mnuchin transparently tried to sooth markets by telling a crowd of reporters who accompanied him to the US Mint in Philadelphia that investors shouldn’t worry about rising inflation and Treasury yields – even with the 10-year yield so close to crossing into the “danger zone” above 3%.
Quoted by Bloomberg, Mnuchin swatted away the suggestion that investors are worried about rising prices, even as the average hourly wage number for January soared the most since 2009, triggering this month’s “volocaust”. Why? Because in Mnuchin’s mind, wage inflation and rising consumer prices have only a tenuous link – if that.
“There are a lot of ways to have the economy grow,” Mnuchin said in an interview aboard a train to Philadelphia on Thursday, where he toured the U.S. Mint. “You can have wage inflation and not necessarily have inflation concerns in general.”
If that’s true – it’s certainly news to us. And judging by the tone of these dismayed Jeffrey Gundlach tweets, we’re not alone.
Read moreSteven Mnuchin’s Most Bizarre Claim Yet: “There Is No Link Between Rising Wages And Inflation”