WASHINGTON (AP) — Treasury Secretary Steven Mnuchin said Thursday that the negative market reaction following the Federal Reserve’s rate hike this week was “completely overblown.”

Mnuchin said the market overreacted, with computerized program trading taking over and driving stock prices down further. In a Fox Business interview, Mnuchin said that he believed markets were disappointed in Powell’s comments at a news conference following the meeting.

The Fed boosted its key policy rate for a fourth time this year but lowered its projections for further rate hikes from three to just two. However, this failed to calm investors’ concerns that the central bank is not taking into account warning signs that the economy is slowing.

“I think the market reaction is completely overblown,” Mnuchin said, noting that the U.S. economy is still projected to out-perform other countries next year.

While the Fed trimmed its forecast for growth as measured by gross domestic product to 2.3 percent next year after an expected 3 percent GDP gain this year, Mnuchin said the administration still believes it can achieve 3 percent annual growth next year as well.

He said that investors were missing the fact that while the Fed’s median forecast was for two more rate hikes next year, the Fed’s updated projections showed that a number of Fed officials have trimmed their expectations of how many rate hikes will be needed in the current credit tightening cycle.

The Treasury secretary said investors were also overly worried with the Fed’s current program to trim its balance sheet from the $4.5 trillion record level it hit when it was buying Treasury securities and mortgage-backed bonds to lower long-term rates.

“The good thing about them downsizing the balance sheet now is it gives them capacity if they need to do something later in the year or next year,” Mnuchin said.

On the issue of whether the current trade negotiations between the United States and China will be able to reach a deal to avoid more penalty tariffs, Mnuchin expressed cautious optimism.

“We’ve been having ongoing trade discussions by phone over the last few weeks,” he said. “We are moving forward with those discussions and trying to reach an agreement … which covers the whole range of issues.”