Trump Blames "Crazy" Federal Reserve As Wall Street Suffers Ugly Losses

11 October, 2018, 10:02 | Author: Eric Barnett
  • President Trump speaks to reporters while departing for travel to Iowa from the White House in Washington

He has frequently criticized the USA central bank for gradually raising interest rates, and on Wednesday reiterated his position: "I really disagree with what the Fed is doing".

"Actually it's a correction that we've been waiting for for a long time, but I really disagree with what the Fed is doing", Trump told reporters before a political rally in Pennsylvania. A stock market correction is defined as a decline of at least 10 percent from the high point of the past 52 weeks, suggesting that major USA indices have further to fall. "The Fed has gone insane", Trump said. The S&P 500 was down 3.3 percent, and the Nasdaq saw losses of 4.1 percent.

"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.

Rising bond yields have been drawing investors out of the stock market, and the best-performing stocks over the past year took some of the biggest losses on Wednesday.

The White House said Wednesday that the "fundamentals and future" of the US economy are "incredibly strong" despite the big losses in the stock market.

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. "It's all about investors rethinking their exposure to stocks."Many of the biggest USA names fell hard in Wednesday's session, with Apple, Boeing and Facebook all slumping more than four percent and Amazon, Nike and Microsoft shedding more than five percent".


Bourses in Paris and Frankfurt both lost more than two percent, while London fell 1.3 percent.

Stocks have sold off in recent days on worries about higher borrowing costs. He has repeatedly criticised the central bank for raising interest rates this year, decisions aimed at preventing the economy from overheating.

"It's probably healthy. This will pass and the USA economy remains strong".

Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners, said that although the losses caught him off-guard, he thought many investors were unduly frightened by the rising rates.

The sell-off 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. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.

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