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

The Dow took a beating Wednesday

"I think I know about it better than they do", Mr. Trump said, again criticizing Fed interest-rate hikes.

Trump's comments Wednesday triggered a sell-off on Wall Street, with Asian markets opening sharply lower on Thursday in response.

U.S. presidents have rarely criticised the Fed in recent decades because its independence has been seen as important for economic stability. The Fed, through something called the federal funds rate, controls short-term rates. Three have PhDs in economics and three have law degrees.

Bank of England Governor Mark Carney also joined in, saying "I think the sanest way to answer that question is to associate myself entirely with Lesetja's answer". Keeping interest rates low too long risks stoking inflation, which could wreak a kind of havoc the markets haven't seen for decades.

But those actions have drawn scorn from Trump, who has accused the Fed of moving too fast in raising rates when inflation is minimal and government data points to a strong economy.

The benchmark Nikkei 225 dropped almost two percent at the open and extended losses to below the three-percent mark, as traders fretted about surging interest rates and an ongoing trade spat.

Stocks have sold off in recent days on worries about higher borrowing costs.

And the housing sector is especially sensitive to the longer-term interest rates set on the bond market, which in turn determine mortgage rates.

Powell and Trump haven't personally discussed the matter, the Fed chair has said, but Trump's rhetoric has alarmed some Democrats and Republicans on Capitol Hill.

Legal oversight of the Fed lies with Congress, where Powell has been busy bolstering relations on both sides of the political aisle.

The Republican president told the presenters: "They're [Fed bankers are] making a big mistake".

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"In the absence of a specific trigger, investors are now voting with their feet due to mounting concerns around trade tensions and the impact on global growth, higher interest rates in the USA, and a potential rotation away from equities due to rising bond yields", said Richard Hunter, head of markets at Interactive Investor.

It's stressful to watch the big market swings, but everything will probably beall right if Fed Chairman Jerome H. Powell keeps doing the right thing by shrugging of Trump's tweets.

In July, the president complained about the Federal Reserve raising interest rates.

But the Federal Reserve has been gradually raising its interest rates since 2015, bringing the target for its benchmark rate to a range of 2% to 2.25% last month.

Trump's latest attack on the US central bank appeared to blame the Federal Reserve for a stock rout that market analysts mostly attributed to fresh concern about his trade war with China. "That doesn't seem especially surprising".

Mr Trump also renewed his criticism of the U.S. central bank.

Add it all up, and it means the world's most savvy investors are betting that the US economy will keep growing at a healthy clip, without inflation emerging, but that the Fed will have to keep raising rates well above current levels in order to prevent that inflation.

President Donald Trump said he believes "the Fed has gone crazy" amid recent interest rate hikes.

Trump's politicking with interest rates has the potential to backfire.

In a brief interaction with reporters and later in comments to Fox News, Trump said the USA central bank was "too aggressive" in raising interest rates.

Lawler said a more dovish tone from the Fed would go a long way to convince investors that robust US economic growth and strong corporate earnings are here to stay. "Where is the inflation that they are fighting?"

Stocks are in the midst of a scary October slump, sliding sharply because investors are anxious about rising interest rates. Economic growth has improved, and Republicans have taken steps to cut taxes and regulations. And tech stocks got hit particularly hard.

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