While stocks had been pairing losses, Trump himself sent them back into a tailspin with a Tweet slamming the Fed, and prompting increased speculation that he was prepared to fire Fed chairman Jerome Powell.
But while the president has publicly expressed his disapproval of the Fed's policy - having previously told the Washington Post he was "not even a little bit happy with my selection of Jay" - Mnuchin on Saturday put to rest rumors of Powell's impending departure.
"They're raising interest rates too fast because they think the economy is so good".
The Dow dropped by 2.9% and the S&P 500 fell 2.7%, the biggest drops ever for the two indexes on Christmas Eve.
President Donald Trump said Tuesday he remains confident in his treasury secretary, a day after markets tanked on fears about the Federal Reserve and a peculiar call between Treasury Secretary Steve Mnuchin and bank CEOs.
"Yes, I do", Trump said Tuesday when asked whether he had confidence in Mnuchin.
POPs: experts investigate high-rise building in Sydney
The 36-story building includes 392 apartments, a retail area, and a childcare center, according to the Sydney Morning Herald . A resident of the Opal Tower told the Nine News network he heard a "big bang" as if something in the building had "snapped".
The President - answering reporters' questions at the White House after addressing United States armed forces members on a Christmas Day video conference call - said the Fed was hiking borrowing costs because the "economy is doing so well", adding that U.S. companies were having "record kinds of numbers" and it is a "tremendous opportunity to buy". The S&P 500 finished about 19.8 percent below its September 20 closing high, just shy of the 20 percent threshold commonly used to define a bear market.
Mnuchin also spoke on Sunday with the heads of the six largest US banks, who confirmed they have enough liquidity to continue lending and that "the markets continue to function properly". "I think its a tremendous opportunity to buy".
Adding to jitters, Trump's acting chief of staff, Mick Mulvaney, on Sunday said a partial USA government shutdown could continue to january 3, when the new Congress convenes and Democrats take control of the House of Representatives. Stock prices have plunged in recent weeks on concerns about the economy. "I think the increasing of interest rates and the shrinking of the Fed portfolio is an absolute bad thing to do at this time".
Media reports have suggested Trump has gone as far as discussing firing Powell, and he told Reuters in August that he was "not thrilled" with the chairman.
The Fed hiked interest rates again last week, as had been widely expected. Mnuchin said the CEOs all assured him they have ample money to finance their normal operations. "He also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly".