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

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

"It's a correction we have been waiting for a long time", Trump said.

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

One reason why the Fed has been raising interest rates even with little sign of an inflation breakout is because the unemployment rate, which fell to 3.7 percent in September, is at a level that many officials expect will cause wage and price gains to accelerate over time. "It's all about investors rethinking their exposure to stocks."Many of the biggest USA names fell hard in Wednesday's session, with Apple, Boeing and Facebook all slumping more than four percent and Amazon, Nike and Microsoft shedding more than five percent".

However, asked about Powell's future, Trump said, "I'm not going to fire him".

The biggest driver for the market over the last week has been interest rates, which began spurting higher following several encouraging reports on the economy.

The Fed traditionally remains outside the purview of the President, though Trump has at moments blurred the lines by commenting on Fed policy.

"This is just who we are and I think who we will always be, which is, we're a group who - we're quite removed from the political process", Powell said in a recent interview.

Trader Peter Tuchman works on the floor of the New York Stock Exchange Wednesday Oct. 10 2018. The Dow Jones Industrial Average plunged more than 800 points its worst drop in eight months led by sharp declines in technology stocks. (AP

The Federal Reserve can likely stop raising United States 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.

"I'm not thrilled because we go up", he explained, "and every time we go up they want to raise rates again, and I don't really - I am not happy about it, but at the same time I'm letting them do what they feel is best".

The governors of the Bank of England and South Africa also came to Powell's defense during the same meeting.

President Donald Trump blamed the Federal Reserve for Wednesday's 832-point stock dive. "The fundamentals and future of the USA economy remain incredibly strong", she said, pointing to a 50-year low in unemployment, tax cuts, reduced regulatory burdens, bigger paychecks, and new trade deals that have specifically benefitted farmers, ranchers, and manufacturers.

The yield on the 10-year US Treasury note has risen to around 3.1 per cent from around 2.1 per cent over the past year.

Stocks are in the midst of a scary October slump, sliding sharply because investors are anxious about rising interest rates. Francis Tan, an investment strategist at UOB Private Bank, said "the valuation of USA stocks, especially tech stocks, is still pretty high", suggesting markets could further to fall.

The S&P 500 posted its fifth straight decline, plummeting almost 3.3%.

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