Trump says market drop is 'correction that we've been waiting for'

Marco Green
October 11, 2018

President Donald Trump again criticised the Federal Reserve for raising interest rates, calling it a "mistake" hours after the worst USA stock market sell-off since February. "No, I think the Fed is making a mistake".

President Donald Trump said he believes "the Fed has gone crazy" amid recent interest rate hikes. But he downplayed the first major drop in months, saying it was a "correction that we've been waiting for". "But I really disagree with what the fed is doing. OK?"

Tech and luxury stocks have been among those to feel the worst pain in the sell-off. The benchmark 10-year Treasury yield surged to a seven-year high on Tuesday and the 30-year bond yield jumped to its highest since 2014. "The Fed has gone insane".

The Dow Jones Industrial Average has plunged more than 800 points, its worst drop in eight months, led by sharp declines in technology stocks.

"My assumption for the policy rate is that we can achieve our objective of keeping inflation to the 2 percent symmetric objective and the unemployment rate slowly rising back towards its sustainable rate with that stance of funds rate - but if we need more, we'll do more", he said. "It's all about investors rethinking their exposure to stocks". A spike in Treasury yields and solid USA economic data have sparked concerns that the Federal Reserve may pick up the pace of its interest rate hikes.

"The fundamentals and future of the USA economy remain incredibly strong", Sanders said in a statement. The Fed is expected to raise interest rates at least three times in 2019, up from the two hikes that it forecasted in December.

Powell's goal is to extend the second-longest USA 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. The S&P 500 lost 94 points, or 3.3 percent, to 2,785.

As for whether Wednesday's overall market drop could signal an end to broader economic growth, Benedict says there won't necessarily be long-term affects if the markets can stabilize before the losses grow more severe.

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 shifting the tectonic plates", said Jack Ablin, chief investment officer at Cresset Wealth Advisors. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.

Other reports by Click Lancashire

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