U.S. President Donald Trump said Wednesday's stock market sell-off was a correction that was long awaited, and that the Federal Reserve, which has been raising interest rates, has gone "crazy".
Ahead of a campaign rally for the United States mid-term elections, Trump told reporters: "I think the Fed is making a mistake". "But I think the Fed has gone insane", he went on.
The Dow Jones stock market average dropped by 831 points, which is 3.15 percent of its opening value on Wednesday.
But he downplayed the first major drop in months, saying, "it's a correction that we've been waiting for a long time".
Money Map Press chief strategist Keith Fitz-Gerald, Fox Business correspondent Kristina Partsinevelos and Capital Wave forecast editor Shah Gilani discuss President Trump's criticism of the Federal Reserve. "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".
"I think. the Fed is making a mistake".
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The broad US stock market sell-off Wednesday 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.
She said in addition to rising interest rates, investors also fear that company profit margins will be squeezed by rising costs, including the price of oil. The Dow and the S&P 500, the benchmark for many index funds, both lost more than 3 per cent, and the NASDAQ fell more than 4 per cent.
The Fed last raised interest rates in September and left intact its plans to steadily tighten monetary policy, as it forecast that the USA economy would enjoy at least three more years of economic growth.
The central bank's preferred measure of inflation is roughly at policy makers' 2 percent objective, and Powell said last week that "the outlook of forecasters inside and outside the Fed is for more of the same".
Trump's comments echo his previous criticisms of recent months, which broke more than two decades of White House tradition of avoiding comments on monetary policy out of respect for the independence of the USA central bank. "But I really disagree with what the Fed is doing".
Trump was briefed on the market turmoil earlier in the day, a White House official said. Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.