Trump blames Fed for stock rout, says central bank ‘ridiculous’

The Dow took a beating Wednesday

U.S. President Donald Trump said Wednesday's stock market sell-off was a correction that was long awaited, and that the Federal Reserve, which has been raising interest rates, has gone "crazy".

'It is a correction that I think it is caused by the Federal Reserve, with interest rates, ' Trump told reporters at the White House. "I think the Fed has gone insane".

The Fed is walking a narrow path, raising rates to return to a more normal interest rate environment but trying to keep the pace below where it might impact economic growth.

Fed Chairman Jerome Powell is aiming 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. I don't know what their problem is.

"The Fed has not gone insane".

But in August, Trump said he was "not thrilled" with Powell, though he took his criticism much further on Wednesday when he said the Fed was "crazy".

White House economic adviser Larry Kudlow sought to downplay Trump's comments about the Fed.

White House Press Secretary Sarah Huckabee Sanders said in a statement following the close of markets that the USA economy is "incredibly strong" despite the sell-off.

The U.S. Federal Reserve is plum loco.

The gradually rising rates, Fed officials say, are meant to guard against any quick run-up in inflation, while remaining low enough so far for the recovery and a strong run of job growth to continue.

Responding to big losses on Wall Street, President Trump said Thursday that he understands the economy better than the Federal Reserve.

And while borrowers lament higher interest rates, savers, especially seniors, are celebrating that they can finally earn some interest from their savings accounts.

In fact it is largely his policies that are behind the changes: tax cuts and increased government spending are expected to juice the economy, adding to the Fed's justification to raise interest rates.

If investors are on edge now because of this week's declines, they will be really rattled if the Fed lost its independence.

"I'm paying interest at a high rate because of our Fed", he added, referring to the cost of servicing the United States deficit. Higher interest rates could increase his debt payments considerably.

"This is just who we are and I think who we will always be, which is, we're a group who - we're quite removed from the political process", Powell said in a recent interview. Trump owes more than $300 million to Deutsche Bank AG of debt with interest rates that rise or fall depending on Fed policy.

Treasury Secretary Steven Mnuchin went to Indonesia this week intending to push President Donald Trump's tough stance on China with U.S. allies - but found himself once cast as the administration's defender-in-chief.

The breach of norms is not surprising for a real-estate-developer and reality-star-turned-president who has cheered as Wall Street has soared to new heights this year, hitting repeated records, and used that as proof his economic policies were working.

So, no, the rout wasn't caused by growing worry over Trump's trade wars, which the International Monetary Fund cited in cutting its outlook for global growth on Tuesday. "I like to stay uninvolved", Trump said. When interest rates rise, bond yields typically do as well as investors pull money out of stocks and move them into bonds to capitalize on the higher (and safer) returns.

Related:

Comments

Latest news

Riley refutes reports he called Thibodeau a 'motherf-----' following trade talks
Meanwhile, Butler didn't play in a 143-121 preseason loss to the Milwaukee Bucks on Friday night, October 12. Butler is set to earn $20.4 million this season and has a player option worth $19.8 million in 2019-20.

Akshay Kumar walks out of film that has two sex offenders
Farhan lashed out at Aisha actor Amrita Puri for insinuating that Sajid's family knew about his misconduct but chose to ignore it. Sajid Khan has, however, denied the allegations mentioning he will find a way to prove that the allegations are false.

Trump To Visit Storm-Ravaged Areas
About 285 people defied mandatory evacuation orders in Mexico Beach . "It's insane. FEMA used dogs, drones, and Global Positioning System in the search.

United States cardinal resigns amid accusations of church sex abuse cover-up
And the cardinal will stay on as the "Apostolic Administrator" of Washington in the short term until a new archbishop is chosen. For his part, Bishop Wuerl was sent back to his native Pittsburgh, where he was installed as the diocesan bishop in March 1988.

PH wins seat in United Nations human rights body
India was elected to the United Nations' top human rights body on Friday, for a period of three years beginning January 1, 2019. More than 30 Western countries have called on the Philippines to allow a United Nations probe into alleged human rights abuses.

Other news