Trump Takes Swipe at Fed as Stocks Tumble

Trump Takes Swipe at Fed as Stocks Tumble

President Donald Trump has renewed criticism of the USA central bank, blaming "crazy" interest rate rises this year for prompting steep stock market falls.

"The Fed has gone insane", he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally.

"I think the Fed has gone insane", President Donald Trump said.

The president took aim at the Federal Reserve, led by Jerome Powell whom he personally chose to lead the bank, after the Dow Jones Industrial Average fell 3%, or more than 800 points, in Wednesday trading - its worst drop in eight months.

Despite Wednesday's sell-off, the S&P 500 would still need to more than double its losses.

"I think the Fed is making a mistake".

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.

"My assumption for the policy rate is that we can achieve our objective of keeping inflation to the 2 percent symmetric objective and the unemployment rate slowly rising back towards its sustainable rate with that stance of funds rate - but if we need more, we'll do more", he said.

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As of 10:00 am GMT, Dow futures plunged 238 points, futures on the S&P 500 sank 22.5 points, while Nasdaq futures were down 49.5 points.

Investors are leaning into safer stocks with steady dividends - utilities and consumer staples - and pulling out of the higher-paying, higher-risk stocks as other guideposts of growth, like the communication sector, tumbled.

The Fed last raised interest rates in September and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of economic growth.

Powell's goal is to extend the second-longest USA economic expansion on record by moving interest rates up just quickly enough to prevent overheating, but not so rapidly that the central bank chokes off growth.

Concerns about US Federal Reserve interest rates are also worrying investors. "I just don't think it's necessary to go as fast".

"The fundamentals and future of the US economy remain incredibly strong", Sanders said in a statement.

Bourses in Paris and Frankfurt both lost more than two percent, while London fell 1.3 percent.

"I stood on the floor in the crash of '87, so this is nothing", Benedict said. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.

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