"I think the Fed has gone insane".
But he's also calling the drop "a correction we've been waiting for for a long time".
On Wednesday, he discounted the stock market's plunge - with the Dow Jones industrial average falling 831 points.
Trump, who has frequently invoked rising stock prices as an affirmation of his economic policies, downplayed the significance of the market drop even as he pointed the finger at the Fed.
Last week's jump in yields followed strong United States data but many analysts have been anticipating a change in the dynamics in the bond market due to expectations that central banks in Europe and Japan will soon phase out bond-buying programmes.
Trump has previously criticized the Federal Reserve for its interest-rate hikes and said it did not "have to go as fast".
Naeem Aslam, chief market analyst at Think Markets, said: "We have not experienced anything like this since Brexit and if you look at the Nasdaq, it becomes clear that the sell-off was actually triggered by the technology stock".More news: Markets hammered after USA stocks rout
But Mnuchin said in media interviews on the Indonesia resort island of Bali, where the World Bank and International Monetary Fund are meeting, that "this is not a systemic issue".
Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies $110 billion of American products. Economists generally agree that in order to prevent runaway inflation, the Federal Reserve can raise interest rates to restrain the money supply. At just over 2 percent, the Fed's short-term policy rate remains low by historic standards, and most indexes of borrowing costs and credit flows still regard broader financial conditions as "loose" and conducive to economic growth.
Mr. Trump said earlier this week that he thought the central bank was moving too quickly with a series of planned interest rate hikes.
"I like low interest rates", Trump said.
A Fed official said the central bank would not comment on the president's remarks.
"The fundamentals and future of the United States economy remain incredibly strong", press secretary Sarah Sanders said in a statement after the close. "The fundamentals and future of the US economy remain incredibly strong", she said, pointing to a 50-year low in unemployment, tax cuts, reduced regulatory burdens, bigger paychecks, and new trade deals that have specifically benefitted farmers, ranchers, and manufacturers.
During an event earlier Wednesday amid the sell-off, Trump and his top economic adviser, Larry Kudlow, said they believed the US economy was strong.