STEVE INSKEEP, HOST:
We are watching several television screens in our studios which have been showing changes in the Dow Jones Industrial Average second by second by second. To be frank, each blip in the market tells us nothing that we really need to know, but the trend of the last few days is pretty dramatic. On Monday, stocks dropped 1,175 points, and the market is off to a volatile start today. And that's after, of course, last week's down week. Joining us to sort some of this out is NPR White House correspondent Scott Horsley. Scott, good morning.
SCOTT HORSLEY, BYLINE: Good morning.
INSKEEP: And also our business reporter Jim Zarroli is with us. Jim, good morning to you.
JIM ZARROLI, BYLINE: Good morning.
INSKEEP: Scott, we're here in Washington. Is the Trump administration saying anything about the markets the last few days?
HORSLEY: Not a whole lot. The treasury secretary was on Capitol Hill today, and Steven Mnuchin didn't volunteer anything about the market's volatility. He was pressed on the subject by Texas Congressman Jeb Hensarling. Here's what the treasury secretary had to say.
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STEVEN MNUCHIN: 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. 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. And we continue to believe in the long-term impact of the stock market.
HORSLEY: So that's an echo of what we heard from the White House yesterday, focus on the fundamentals - jobs, wages, corporate earnings still pretty good.
INSKEEP: Which is, you know, good advice for any president, although of course the president was crowing about the stock market just a few days ago. Jim Zarroli, you're there in New York. You're monitoring this. And you talk to a lot of businesspeople and investors. Even though we are reassured that a brief change in the market is not that big a deal, is it psychologically important for some investors, or even financially important for some?
ZARROLI: You know, it can be. It can cause people to lose confidence in the stock market, especially small investors. And remember, it's been a while since we've seen this kind of volatility. I think people have been maybe lulled into thinking that, you know, everything was great, the market was going to keep going up for a while. Every now and then we get this kind of bracing reminder that that's not necessarily the case.
INSKEEP: Let's think about the big drops of recent years. There was the financial crisis, 2007, 2008. Huge drops from time to time and over time. Big drops in 2011 at the debt ceiling crisis. Is there some worry in the broader economy now that you would link to this drop?
ZARROLI: I mean, I think this can be linked back to the unemployment report on Friday morning which said that wages were going up at a pretty significant clip. And that just got people worried about inflation, about prices going up and about what the Federal Reserve would do. And that's always - you know, wage growth is a wonderful thing if you're a worker, but if you're a company trying to sell stock, you know, that makes you worry about the bottom line. And I think that's what this is. I mean, there's no reason to think that there's any real major shift in the economy. It's just people coming to terms with inflation and fears about interest rates.
INSKEEP: And we should mention that stocks are just slightly down at the moment. Every second we are looking at these TV screens. The Dow Jones Industrial's down about 71. Now down about 80, which is moderately down compared to more than a thousand dropping yesterday. So you're saying that this good news for workers may be somewhat edgy news at best for for employers. And this is something that would cause people to realize that stocks are a little overvalued, which is what people have been saying for a while anyway?
ZARROLI: Yeah. For sure. I mean, the market has been going up so much. January was such a good month. I mean, if you've got a retirement fund and you, you know, track the amount of money in it, you know that. It's just been a really good time to be in the stock market, and that's why President Trump has been bragging about it so much, which is, you know, kind of unusual for a president to do, but, it's been a wonderful time. And now people, every now and then they, I guess, they need to be reminded that, you know, what goes up can come down.
INSKEEP: Scott Horsley, I want people to know that you have covered both the White House and the economy for many, many years. With the longer view that you have, what's on your mind as you watch all of this this morning?
HORSLEY: It's going to be interesting to see if President Trump takes a lesson from this and stops talking about the stock market because as Jim points out, it is a fickle barometer. Politicians generally don't talk a whole lot about it because it can go down as well as up, and also because it's only about half the country that owns any stocks. There are more wage earners than investors so it's a kind of a narrow slice to be talking about.
INSKEEP: NPR's Scott Horsley and Jim Zarroli, thanks to you both.
HORSLEY: You're welcome.
ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.
