Mnuchin's comments caused the dollar to nosedive and raised concerns about an impending currency war that would prompt countries to weaken their currencies to make their exports more competitive.
However, a pickup in inflation could actually threaten the recent gold rally, depending on how it affects central-bank policy and the dollar. Bentsen, a politician with populist tendencies, would have been better off employing the practice developed by his successor, Robert Rubin, the former Goldman Sachs trader and executive who liked to proclaim, "A strong dollar is in the interest of the USA", even when he didn't really mean it. The flawless fillip for USA equities that are beginning to look stretched and expensive.
The comments were taken by the market and many observers as signalling a change in the US Treasury's stance toward the Dollar, with some claiming it might now be deliberately trying to push the greenback lower against its global rivals.
That came as Commerce Secretary Wilbur Ross defended this week's stinging United States tariffs on solar panel imports and warned of further retaliation against nations Washington feels have broken the rules, ramping up fears of a possible global trade war. A falling dollar when the economy is weak can be beneficial, boosting demand for U.S. goods overseas.
Still, the reception was more polite than might have been expected, given the open anxiety with which the prospect of a Trump presidency was met at Davos a year ago. A sweet spot for world markets.
And despite the Fed's five rate hikes and near certainty of more to come, financial conditions in the United States have not been this loose for more than three years, according to Goldman Sachs.
Following the president's comment, the dollar bounced-back from its three year slide against the Euro. Even perennial laggard Italy appears to be turning a corner, despite the rampant euro.
"He did talk about making sure trade deals are fair, but I just thought it was a completely different tone today", said JJ Kinahan, chief investment strategist for TD Ameritrade.
On the surface at least, this marks a departure from his predecessors Larry Summers, Paul O'Neill, John Snow, Hank Paulson, Tim Geithner and Jack Lew.
Writing in The Washington Post on Thursday, Summers said Mnuchin had made a "very problematic statement". Higher interest rates would strengthen the dollar and push oil prices down. A weak currency tends to boost production in the country of that currency, while a stronger currency lends support for consumers as well as tourists looking to travel overseas.
However, in his haste to correct (read "undermine") his Treasury Secretary, the President has inadvertently done much more: Talking the dollar up or down has now become the key takeaway from Davos. His message, which he will proclaim in a speech Friday, is that delegates at the World Economic Forum's annual meeting were wrong to doubt his ability to spur the US economy and stocks.
However, the dollar's role in fueling the bull run for oil does not mean that current trends will continue.