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

U.S. President Trump boards Air Force One prior to departing from Joint Base Andrews Maryland

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".

Trump's comments about the Fed going "crazy" came in contrast to a more measured statement issued by the White House about how the economy was strong. "President Trump's economic policies are the reasons for these historic successes and they have created a solid base for continued growth". Trump instead has placed blame squarely with the Fed. Three have PhDs in economics and three have law degrees.

"I'm paying interest at a high rate because of our Fed, " he said. The Federal Reserve is determined to continue until at least the end of next year.

Trump said he had no intention of firing Powell. It is often tied to higher costs of borrowing for the federal government, which can spook investors. The International Monetary Fund cut its outlook for global growth this week, citing interest rates and trade tensions.

Trump's use of the word "correction" to describe the selloff could be significant.

"They lived too well for too long and frankly I guess they think that the Americans are stupid people".

"We're quite removed from the political process", Powell said in an interview last week at the Atlantic Festival in Washington.

"And we just try to do the right thing for the medium and longer term for the country". "We don't let other things distract us".

Trump blamed the Federal Reserve - and his appointee Powell - for the big drop Wednesday.

But one unintended effect is that raising interest rates can scare off investors and precipitate a sell off in equities.

"I don't think it's that at all", he said. The Fed's main interest rate, the federal funds rate, now stands between 2 and 2.25 per cent.

Rates took their latest spike higher amid a report Friday which showed the lowest unemployment rate in 49 years, along with rising wages. "That doesn't seem especially surprising". "So the Fed is taking its independent course", he said.

The FOMC determines the target range for the funds rate and the New York Fed buys or sells Treasury securities to commercial banks to influence the rate by increasing or reducing the supply available.

Most Fed officials see a bit more tightening ahead for the Fed than Mr Evans indicated on Wednesday.

White House economic adviser Larry Kudlow sought to downplay Trump's comments about the Fed.

During that same September meeting, the Federal Reserve hiked the benchmark interest rate by one-quarter of a percentage point, the third such increase so far this year.

The Fed is walking a narrow path, raising rates to return to a more normal interest rate environment but trying to keep the pace below where it might impact economic growth. "Where is the inflation that they are fighting?"

Hundreds of companies are due to provide investors with updated earnings forecasts in coming weeks.

Most economists consider a reputation for independence essential for maintaining a central bank's credibility with investors that it will guard against inflation.

"I wonder today whether Trump really has some buyer's remorse with respect to selecting Powell as his Fed chairman, because that was a unusual pick", Moore said.



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