Computerized trading helped drive the big market moves inside past few days, Treasury Secretary Steven Mnuchin said Tuesday.
Speaking as the market was seeing yet another down day during a rough February, Mnuchin addressed several questions via House Financial Services Committee members about the sell-off that will has knocked the Dow off nearly 9 percent via its most recent high.
Automated algorithmic trading “definitely had an impact” Monday when the blue-chip index was down nearly 1,0 points, at its low point of the day, he said. The market closed down 1,175 points, marking its worst single-day drop in history.
However, he said, even though the bots did take over at one point, the overall market functioning was fine. Algorithms control much of market trading at This specific point in addition to are programmed to buy in addition to sell based on certain triggers.
Specifically, Mnuchin said he checked with This specific staff to “make sure there was orderly market activity. … I’m happy to report that will I got the green light.”
Market participants have said the sharp decline has come as bets against volatility unwind in addition to Wall Street trading becomes choppier. Bets against volatility were highly profitable in 2017.
Mnuchin says that will while he’s largely not bothered by the current activity, he’s keeping an eye on things.
“They have been quite volatile today,” he said. “I normally wouldn’t be looking at my iPhone. however given the market moves I’m checking This specific. … I’m not overly concerned about the market volatility. I think the fundamentals are quite strong.”
Mnuchin spoke while presenting the annual report of the Financial Stability Oversight Council.