Global stocks tumble after Trump 'crazy' Fed comment

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Global stocks tumble after Trump 'crazy' Fed comment

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".

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

At market close Wednesday, the Dow Jones average was still up more than 5,000 points since President Trump took office.

"Actually it's a correction that we have been waiting for, for a long time", he continued.

"I believe this selling is an overdone panic", Feinseth said.

The turmoil on stock markets came a day after the International Monetary Fund slashed its global growth forecast on worries about trade wars and weakness in emerging markets.

Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies of $110 billion of American products. The Fed has predicted that unemployment will remain below 4 percent through 2020 and inflation is expected to track around 2 percent, conditions that Federal Reserve chief Jerome H. Powell called "remarkably positive". Presidents for more than two decades had avoided public comments on the Fed's interest-rate policies as a way of demonstrating respect for the institution's independence.

"Clearly stocks are spooked by higher rates and maybe some inflation that seems to be creeping in", said Michael Farr, CEO of Farr, Miller & Washington.

Trump said Tuesday that the economy is enjoying "record-setting" numbers and "I don't want to slow it down even a little bit, especially when we don't have the problem of inflation".

He has frequently criticised the USA central bank for gradually raising interest rates.

White House Press Secretary Sarah Sanders issued a statement on the drop as well.

Those programmes - such as quantitative easing - are now ending and the Fed has raised United States interest rates three times already this year, raising borrowing costs, and could add a fourth hike by the end of 2018.

"The fundamentals and future of the US economy remain incredibly strong", Sanders said in a statement.

"I like low interest rates", Trump said.

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