Trump calls stock selloff 'a correction,' says Federal Reserve is 'crazy'

President Trump speaks to reporters while departing for travel to Iowa from the White House in Washington

President Trump speaks to reporters while departing for travel to Iowa from the White House in Washington

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". "They're so tight. I think Fed has gone insane", president Trump replied. "But I think the fed has gone insane".

They include the U.S. trade war with China and the potential impact on global growth while rising bond yields have diverted attention from equities - stocks - which have been offering the most attractive returns for years because central bank stimulus had flooded markets with cheap money.

The Dow Jones dropped by more than 800 points on Wednesday in one of the worst days for the stock market since February, and President Donald Trump had an explanation ready when asked by reporters.

Trump has often pointed to stock market records set during his time in office as a measure of his success. "But I really disagree with what the Fed is doing, okay?"

The turmoil came a day after the International Monetary Fund slashed its global growth forecast on worries about trade wars and weakness in emerging markets.

Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies of $110 billion of American products. By convention presidents rarely comment on central bank policy because the Fed is meant to be independent of politics.

Trump's public criticism of the Federal Reserve, whose chairman, Jerome Powell, Trump appointed, is a sharp departure from his recent predecessors.

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Fed spokeswoman Michelle Smith declined to comment on Trump's remarks.

But those actions have drawn scorn from Trump, who has accused the Fed of moving too fast in raising rates when inflation is minimal and government data points to a strong economy.

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. Officials expect to hike rates another quarter percentage-point by the end of this year and gradually continue to raise rates at least through 2019.

White House Press Secretary Sarah Sanders issued a statement on the drop as well.

"The fundamentals and future of the US economy remain incredibly strong", Sanders said in a statement.

During an event earlier Wednesday amid the sell-off, Trump and his top economic adviser, Larry Kudlow, said they believed the American economy was robust.

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