(Bloomberg) -- The White House continues to monitor global financial markets after a meeting Friday between President Joe Biden and his top economic advisers amid a slide in Britain’s pound, and the administration will continue to keep tabs on financial markets, according to the White House.
“We’re going to continue to monitor the global markets,” White House Press Secretary Karine Jean-Pierre said at a briefing Monday. “To your question about the pound, so on Friday as you all know the president and the vice president met with senior members of the economic team and got an update on the global economic developments as they regularly do.”
The UK currency slumped to its weakest since 1985 as investors reacted with concern to newly installed Prime Minister Liz Truss’s economic program of the biggest round of tax cuts since the 1970s. The pound fell further against the dollar Monday, reaching a record low.
As to the Biden administration’s view of the UK’s new economic program, Jean-Pierre noted that “the UK is one of our closest allies” and “we will leave their policy decisions to themselves.”
Besides the pound’s plunge, financial markets have been roiled by a surging dollar against all major counterparts, fueled by the most aggressive Federal Reserve interest-rate hiking cycle since the 1980s. The S&P 500 has dropped more than 10% the past two weeks and Treasury yields have soared.
Biden’s aides delivered a message Friday to the president that the US is well positioned to meet global economic challenges, Jean-Pierre said.
“What we can speak to is what we’re doing here in the US,” she said. “Our US strategy, economic strategy is focused on the long term growth,” aiming to boost investment and manufacturing while pursuing fiscal discipline, she said. That “has positioned our country to navigate challenging global times from the strongest position possible. Again, we’re going to continue to monitor all indicators, we’ll also monitor global markets as well.”
For his part, Fed Chair Jerome Powell, when asked last week about coordination among global central banks, said, “We regularly discuss what we’re seeing in terms of our own economy and international spillovers” in talks with counterparts. He noted he had recently conferred with other central bank officials in Basel, Switzerland.
“It’s hard to talk about collaboration in a world where people have very different levels of interest rates,” Powell said in his Sept. 21 press conference. “If you remember, there were coordinated cuts and raises and things like that at various times” in the past, but “we’re in very different situations” now, he said. “But I will tell you that our contact is more or less ongoing.”
(Adds reference to Powell comment on central bankers’ talks, in final two paragraphs.)
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