Global stocks tumble after Trump 'crazy' Fed comment

I don't like Fed raising interest rates so quickly, says Trump

I don't like Fed raising interest rates so quickly, says Trump

US President Donald Trump said that last night's stock market sell-off was in fact along-awaited "correction", and that the Federal Reserve, which has been raising US interest rates, had gone "crazy".

"The Fed has gone insane", he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally. "They're so tight. I think the Fed has gone insane".

He described the path of rate increases - most recently to a level of 2-2.25% - as "crazy", adding that the stock market reaction was the "correction that we've been waiting for".

The Dow Jones Industrial Average sank 831 points Wednesday, an approximately 3.15 percent drop. 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 USA bought from China a year ago.

The Federal Reserve can likely stop raising U.S. interest rates once they reach about 3 per cent, as long as inflation remains around 2 per cent and the economy is doing well, Chicago Federal Reserve President Charles Evans suggested on Wednesday. "It's all about investors rethinking their exposure to stocks".

The selloff came a day after the International Monetary Fund said the world economy is plateauing and cut its growth forecast for the first time in more than two years, blaming escalating trade tensions and stresses in emerging markets.

Earlier on Tuesday, White House economist Kevin Hassett said the administration respects the Fed's independence and pointed to Trump's nominees to the central bank as evidence of its non-partisan approach to the setting of monetary policy. "The trade war with China, we're taking in billions of dollars in tariffs from China, from Chinese goods, and it hasn't hurt us at all".

A Fed official said the central bank would not comment on the president's remarks. Economists generally agree that in order to prevent runaway inflation, the Federal Reserve can raise interest rates to restrain the money supply.

He said he didn't think the current rate of U.S inflation merits higher borrowing costs.

Carney also praised Fed Chairman Jerome Powell's technocratic expertise.

White House Press Secretary Sarah Sanders issued a statement on the drop as well. 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 is doing well", Trump said. "It's probably healthy. This will pass and the United States economy remains strong".

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

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