Rubin rattles the markets

The decision of US treasury secretary Robert Rubin to step down after six years nearly upset the very apple cart he has carefully tended during that time. Although he had indicated his desire to withdraw from the fray both to return to the private sector and allow his deputy Larry Summers a decent run in the top job in the run-up to the next presidential election, the decision when it came was still a shock.

It had been widely presumed that he would hold on to ensure the US role in helping the global economy out of its recent crises was complete. It would seem he ran out of patience, probably not helped by the fact that Russian president Boris Yeltsin's move to sack his premier Yevgeny Primakov only served to undermine any recovery in its economic prospects.

In some ways the market's reaction to the news reflected the success of Mr Rubin in his years as top economic adviser to President Bill Clinton. The man who ensured that the performance of the US economy allowed the stock markets to rise to record heights despite the Clinton administration's problems saw his own departure marked only by a temporary blip.

Having fallen by as much as 215 points on the news, the Dow Jones recovered to end only 25 points shy of its previous record on the day of the resignation and surge to new peaks the following day. However, they weren't so sure of themselves as the week ended, dipping yesterday as figures emerged suggesting inflation might be on the rise.