Trump blames Fed for stock rout, says central bank ‘ridiculous’

12 October, 2018, 04:37 | Author: Brooke Harris
  • The Federal Reserve is not pleasing President Trump with its policy on interest rate increases

Trump has been publicly criticizing the Fed since July for interest-rate increases and declared he was "not happy" in September when the central bank raised rates for the third time this year.

The steep drop in Japan followed a decline on Wall Street of almost 830 points, the biggest fall since February, amid Trump's latest criticism of the Federal Reserve, the U.S. central bank.

"I'm paying interest at a high rate because of our Fed, " he said.

The policy makers' latest economic forecasts showed a median estimate of 3% for this neutral point over the long term.

Sears nosedived after the Wall Street Journal reported that the struggling retailer hired an advisory firm to prepare a bankruptcy filing that could come within days. "That's all. It's ridiculous what they're doing". The central bank has hiked interest rates three times this year and expects to do so again in December. -China tensions, the Justice Department announced Wednesday it arrested an official of China's Ministry of State Security on charges of trying to steal trade secrets from US aerospace companies.

The Federal Reserve has been gradually raising interest rates to less stimulative levels in response to strong growth in the US economy and historically low unemployment levels.

Fed Chair Jerome Powell, whom Trump named to lead the central bank, has repeatedly brushed off the comments saying officials do not pay attention to politics.

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

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Lawler said Trump's corporate tax cuts have shielded US companies from global concerns.

The Federal Reserve can likely stop raising U.S. interest rates once they reach about 3 per cent, as long as inflation remains around 2 per cent and the economy is doing well, Chicago Federal Reserve President Charles Evans suggested on Wednesday. "But I think the fed has gone insane". "They are so tight". He said, "I think the Fed is making a mistake".

On Wednesday, he discounted the stock market's plunge - with the Dow Jones industrial average falling 831 points. The S&P 500, the market benchmark, closed over 2% lower on Thursday, its sixth straight daily decline.

White House Press Secretary Sarah Sanders said in a statement following the close of markets that the USA economy is "incredibly strong" despite the sell-off, which analysts attributed in part to trade tensions with China.

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

Kevin Hassett, the head of Trump's Council of Economic Advisers, said the president is expressing his views on monetary policy, but he isn't trying to "politicize" the Fed. While the President has set a target of 4 percent growth and seemed well on the way to achieving it through deregulation and tax reform.

Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks.

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