Global stocks tumble after Trump 'crazy' Fed comment

President Trump spoke with reporters after arriving at Erie International Airport for a campaign rally at Erie Insurance Arena on Wednesday

Asian markets plunged on Thursday following the worst session on Wall Street for months, as US President Donald Trump said the Federal Reserve had "gone crazy" with plans for higher interest rates.

Trump, who has been critical of the central bank's interest rate increases, tells reporters after landing in Erie, Pennsylvania, that he thinks "the Fed is making a mistake". "So you can say that well that's a lot of safety actually, and it is a lot of safety, and it gives you a lot of margins, but I think the Fed has gone insane".

The Dow Jones stock market average dropped by 831 points, which is 3.15 percent of its opening value on Wednesday.

Stocks have been under pressure since the yield on 10-year US Treasury bonds jumped above 3% last week, a sudden move that raised fears of an overheating economy, speeding inflation and more aggressive Federal Reserve interest rate increases.

Naeem Aslam, chief market analyst at Think Markets, said: "We have not experienced anything like this since Brexit and if you look at the Nasdaq, it becomes clear that the sell-off was actually triggered by the technology stock".

Trump's comments about the Fed going "crazy" came in contrast to a more measured statement issued by the White House about how the economy was strong.

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Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies of $110 billion of American products. Higher interest rates makes it more expensive to borrow money, giving consumers or businesses pause before taking out a loan.

Trump's comments echo his previous criticisms of recent months, which broke more than two decades of White House tradition of avoiding comments on monetary policy out of respect for the independence of the USA central bank.

"The fundamentals and future of the United States economy remain incredibly strong", press secretary Sarah Sanders said in a statement after the close.

A spike in Treasury yields and solid USA economic data have sparked concerns that the Federal Reserve may pick up the pace of its interest rate hikes. 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. "It's probably healthy. This will pass and the U.S. economy remains strong". "I like to stay uninvolved", Trump said.

"I wonder today whether Trump really has some buyer's remorse with respect to selecting Powell as his Fed chairman, because that was a odd pick", Moore said.

Some of his former advisers said they believed Trump's criticisms of the central bank were warranted.

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