Trump Blames "Crazy" Federal Reserve As Wall Street Suffers Ugly Losses

Trump Blames

Trump Blames "Crazy" Federal Reserve As Wall Street Suffers Ugly Losses

After President Donald Trump warned that the Federal Reserve is "going loco" and "making a big mistake", his chief economic adviser Larry Kudlow stepped in front of reporters at the White House and insisted the President wasn't "calling out the Fed".

"There's a lot of momentum in the inflation process, and I think there's always a concern that if the Fed waits too long to address inflation, then it becomes more hard", said Owen.

"It's a correction that we've been waiting for for a long time", Trump said.

The broad US stock market sell-off Wednesday took the S&P 500 to the lowest in three months, the Dow Jones Industrial Average plunged as much as 836 points and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years. "President Trump's economic policies are the reasons for these historic successes and they have created a solid base for continued growth".

In fact, "interest rates are very low given how strong the economy is, given where inflation is and given where unemployment is", Mr Wessel said.

Stocks have been under pressure since the yield on 10-year US Treasury bonds jumped above three percent last week, a sudden move that raised fears of an overheating economy, speeding inflation and more aggressive Federal Reserve interest rate increases.

The US slump, which amounted to a market value loss of over £800bn, had followed shallower falls across much of Europe.

Fed Chair Jerome Powell, whom Trump named to lead the central bank, has repeatedly brushed off the comments saying officials do not pay attention to politics.

The Fed under his hand-picked chairman Powell has been gradually raising rates as the economy has strengthened to prevent a run-up in inflation.

"That wasn't it", Trump said this week in response to the China theory for the market drop.

Major US markets were lower again in Thursday afternoon trading, with the Dow and S&P 500 down roughly a half percent each.

He went on: "I put $250bn worth of taxes, or tariffs, on China and it's had a big impact". The data suggest there's little sense that interest rates are biting down on their business outlook.

When asked if he is considering firing the chairman of the Fed, Jerome Powell, whom Trump appointed, Trump bluntly answered, "I'm not going to fire him".

In the last few weeks and months, the Federal Reserve has raised interest rates incrementally despite the better judgment of many US entrepreneurs. "They are going to do what they are going to do". The average yield on the 100 largest taxable USA money-market mutual funds averaged 1.95 percent this week, according to Crane Data.

The president has been publicly criticizing the central bank since July for interest-rate increases and declared he was "not happy" in September after the third rate hike of the year.

Tech and luxury stocks have been among those to feel the worst pain in the sell-off.

"He is an individual that really understands the plumbing of the United States and global financial systems and one example is the reforms that are going underway on London Interbank Offered Rate, or Libor, for which he is one of the main sponsors", said Carney.

Mr Trump is correct in saying that rising interest rates tend to strengthen the USA dollar, as investors return funds to the United States in search of higher returns and safer investments. "Markets tend to go too far in both directions and they have natural corrections".

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