Global stocks tumble after Trump 'crazy' Fed comment

A screen above the floor of the New York Stock Exchange shows the closing number of the Dow Jones industrial average Wednesday Oct. 10 2018. The Dow Jones Industrial Average plunged more than 800 points its worst drop in eight months led by sharp dec

A screen above the floor of the New York Stock Exchange shows the closing number of the Dow Jones industrial average Wednesday Oct. 10 2018. The Dow Jones Industrial Average plunged more than 800 points its worst drop in eight months led by sharp dec

Mr Trump has voiced concerns about the pace of tightening in the past but stepped up the rhetoric yesterday when he told reporters: "I think the Fed is making a mistake".

Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies $110 billion of American products.

Though the Fed has been raising its overnight target policy rate, a benchmark for lending costs overall, the current level of between 2 and 2.25 per cent remains just half the average set by the Fed between 1990 and the start of the 2007 to 2009 recession.

Lagarde's comments came as a global market sell-off rolled on following Trump's comments, underscoring rising financial volatility that the International Monetary Fund will address at its annual meetings this week in Bali.

"The US equity bloodbath is taking no prisoners in Asia as a sea of red greets investors at the open, as equity deleveraging and liquidation intensifies", he said.

"I wonder today whether Trump really has some buyer's remorse with respect to selecting Powell as his Fed chairman, because that was a odd pick", Moore said. Higher interest rates could increase his debt payments considerably.

Trump on Thursday also indicated that the Fed's policies were harming him personally. The Fed has "gone insane", he said.

He added later, "The problem, in my opinion, is Treasury's and the Fed".

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"The Fed has gone insane", Mr. Trump told reporters while traveling to Erie, Pennsylvania, for a campaign rally. "The Fed is going loco and there is no reason for them to do it and I'm not happy about it".

Mr. Trump said earlier this week that he thought the central bank was moving too quickly with a series of planned interest rate hikes.

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.

"Later, White House Press Secretary Sarah Sanders said the fundamentals and the future of the United States economy remain incredibly strong".

"The Fed's more-restrictive stance has joined with other signals to unsettle investors even as major USA indexes rose to new highs", the financial daily said. Along with Dow, the S&P 500 tumbled 3.3 percent and the Nasdaq composite fell by four percent.

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

The S&P 500 posted its fifth straight decline, plummeting almost 3.3%. Francis Tan, an investment strategist at UOB Private Bank, said "the valuation of US stocks, especially tech stocks, is still pretty high", suggesting markets could further to fall.

On Wednesday, the Dow fell 831 points, or 3.1 percent, to 25,598.

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