Economy

Trump calls stock sell-off a correction, says Fed ‘crazy’

Trump calls stock sell-off a correction, says Fed ‘crazy’”

President Donald Trump, who has claimed much of the credit for the strong economy, has criticized the Fed's pace of raising interest rates, saying going too fast could slow growth and job creation. "The Fed increasing rates to me was a sign that the economy was able to stand on its own two feet".

"The Fed has gone insane", Mr. Trump told reporters while traveling to Erie, Pennsylvania, for a campaign rally.

"It's a correction we have been waiting for a long time", Trump said.

The tech-rich Nasdaq Composite Index plummeted 4.1 percent to finish the session at 7,422.05, its worst fall in percentage terms since the surprise Brexit vote in June 2016. Powell said last week he expects to stick with the current path of gradual interest-rate hikes while monitoring risks in the economy.

White House Press Secretary Sarah Sanders said in a statement following the close of markets that the United States economy is "incredibly strong" despite the selloff, which analysts attributed in part to trade tensions with China.

On Wednesday, the Dow fell 831 points, or 3.1 percent, to 25,598. Netflix was down more than 8 percent, Amazon was off 6 percent and Apple and Google were both down more than 4.5 percent. "That suggests the Fed will keep raising rates, and that's taking the wind out of the stocks that have done the most, particularly in the tech sector".

O'Hare attributed the losses to worries about higher interest rates but also cited a "broad-scale deterioration in sentiment" as investors realized that the pullback on Wall Street failed to prompt bargain hunting to stabilize prices, as has been the norm in recent years.

Fed Chairman Jerome Powell is aiming 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.

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

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

Trump was briefed on the market turmoil earlier in the day, a White House official said. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.

In other markets, oil prices fell sharply on worries that Hurricane Michael will dent demand for gasoline and other petroleum products.



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