Published: Thu, October 11, 2018
Money | By Armando Alvarado

Trump says Federal Reserve ‘has gone crazy’ after big stock drop

Trump says Federal Reserve ‘has gone crazy’ after big stock drop

"The Fed has gone insane", he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally. Earlier in the day, Trump said the central bank "has gone insane".

Rising bond yields have been drawing investors out of the stock market, and the best-performing stocks over the past year took some of the biggest losses on Wednesday.

It was at least the third time that the president has criticised Fed policy since taking office. "I think that's why the stock market has performed as well as it has". "They're so tight." He noted of today's market, "It's a correction that we've been waiting for, for a long time". The problem I have is with the Fed. The Dow Jones Industrial average fell 3.15 percent; the tech-heavy Nasdaq index dropped 4.08 percent. The IMF projections don't take into account Trump's threat to expand the tariffs to effectively all of the more than $500 billion in goods the US bought from China past year.

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 USA central bank.

During panel discussions at the International Monetary Fund's annual meetings in Bali, Indonesia on Thursday, South African Reserve Bank Governor Lesetja Kganyago stressed the importance of central bank independence when he was asked whether Trump's comments demean the integrity of the institutions.

Powell's goal is to extend the second-longest US 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. Economists generally agree that in order to prevent runaway inflation, the Federal Reserve can raise interest rates to restrain the money supply.

Banksy Pranks Auction House, Shreds $1 Million Artwork
And in true satirical Banksy fashion, he quoted artist Picasso in his caption: "the urge to destroy is also a creative urge". The video showed images of a shredder being implanted into a picture frame along with footage of Friday's auction finale.

The 10-year yield is now 3.20 percent, the highest in than seven years and up sharply form 2.82 percent in late August.

The White House said Wednesday that the "fundamentals and future" of the US economy are "incredibly strong" despite the big losses in the stock market.

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

"The fundamentals of the U.S. economy continue to be extremely strong". Fed officials including Powell, Trump's handpicked chair, have said pointedly that they will not be influenced by comments from elected officials, and will make decisions based on economic data.

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.

Trump has said he likes low interest rates, in part because of his background in real estate.

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