Global stocks tumble after Trump 'crazy' Fed comment

11 October, 2018, 15:59 | Author: Eric Barnett
  • The Dow took a beating Wednesday

President Trump placed the blame on the Federal Reserve's interest rate hikes for driving a selloff in the stock market Wednesday, saying the central bank "has gone insane". "They're so tight. I think the Fed has gone insane", Mr. Trump told reporters after landing in Erie, Pa., for a political rally. A stock market correction is defined as a fall of at least 10 per cent from the high point of the last 52 weeks. The Fed is doing what it thinks is necessary, but I don't like what they're doing because we have inflation really checked and we have a lot of good things happening. And tech stocks got hit particularly hard. "I just don't think it's necessary to go as fast". The broad selloff took the S&P 500 to the lowest in three months, the Dow Jones Industrial Average plunged as much as 836 points and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years.

One reason why the Fed has been raising interest rates even with little sign of an inflation breakout is because the unemployment rate, which fell to 3.7 percent in September, is at a level that many officials expect will cause wage and price gains to accelerate over time. "It's all about investors rethinking their exposure to stocks".

"The markets are fraught with peril", warned Stephen Innes, head of trading at OANDA, adding there was a "horrible intersection of risk aversion" from the US-China trade conflict and rising US interest rates.

"The fundamentals and future of the US economy remain incredibly strong", Sanders said in a statement. The index fell by more than 3%. The criticism is also unusual given that Jerome Powell, the Fed chairman, was appointed by Mr...


Currency investors took shelter in the safe-haven yen, resulting in steep losses for Japanese exporters, with electronics giant Sony down almost five percent as blue-chip firms flashed red across the trading board.

Powell's goal is 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.

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.

As Hurricane Michael pummeled Florida, Wall Street was battered by storms as well, with the Dow shedding about 830 points, in the biggest fall since February, to close the day at 25,498.74.

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