Published: Thu, October 11, 2018
Business | By Eloise Houston

Trump calls stock sell-off 'a correction,' says Federal Reserve is 'crazy'

Trump calls stock sell-off 'a correction,' says Federal Reserve is 'crazy'

With significant drops in the Dow Jones Industrial Average, S&P 500, and broad-based stock market indexes, President Trump said markets are in a "correction", and decried the Federal Reserve's recent rises in interest rates and signals for more to come.

"A lot of people were concerned when the QEs were done whether the Fed would ever be able to downsize and I think the market has handled the supply very well, ' Mnuchin said. It's so tight. I think the Fed has gone insane", Trump told reporters shortly after markets closed, as he arrived in Erie, Pennsylvania for a rally. A stock market correction is defined as a fall of at least 10 per cent from the high point of the last 52 weeks.

The steep drop in Japan followed a decline on Wall Street of almost 830 points, the biggest fall since February, amid Trump's latest criticism of the Federal Reserve, the United States central bank.

Mnuchin declined to comment on Trump's latest attack on the USA central bank, though he repeated that the Fed has independence.

They include the United States trade war with China and its potential impact on global growth, while rising bond yields have diverted attention from equities - stocks - which have been offering the most attractive returns for years because central bank stimulus had flooded markets with cheap money.

"Also, very importantly I think, the numbers we're producing are record-setting", Trump added.

In September, the Federal Reserve raised short-term interest rates for the third time this year.

Fresh concern about a trade war with China and rising interest rates have in part sparked a broad USA stock market sell-off, with the S&P 500 on Wednesday falling the most since February.

"The fundamentals of the USA economy continue to be extremely strong, I think that's why the stock market has performed as well as it has".

President Donald Trump, who has claimed much of the credit for the strong economy, has criticized the Fed's pace of raising interest rates, saying going too fast could slow growth and job creation.

Trump was briefed on the market turmoil earlier in the day, a White House official said. "President Trump's economic policies are the reasons for these historic successes and they have created a solid base for continued growth".

Trump has publicly stated his concerns before, but on Tuesday said he had not discussed them personally with Federal Reserve Chair Jerome Powell, explaining that "I like to stay uninvolved".

During an event earlier Wednesday amid the sell-off, Trump and his top economic adviser, Larry Kudlow, said they believed the USA economy was strong.

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