Business / Financial Markets

‘The Fed has gone crazy’ as Dow dives over 800 points amid rate hike, trade jitters

Bloomberg

President Donald Trump again criticized the Federal Reserve for raising interest rates following the worst market sell-off since February.

“The Fed has gone crazy,” he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally. The central bank “is too tight,” he added.

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

“It’s a correction we have been waiting for a long time,” Trump said. He frequently celebrates publicly when the stock market reaches new highs, pointing to the gains as affirmation for his economic policies.

Trump was briefed on the market turmoil earlier in the day, a White House official said. He has repeatedly criticized the central bank for raising interest rates this year, decisions aimed at preventing the economy from overheating.

“The fundamentals and future of the U.S. economy remain incredibly strong,” Sanders said in a statement. “President Trump’s economic policies are the reasons for these historic successes and they have created a solid base for continued growth.”

U.S. stocks tumbled Wednesday the most since February as fresh concern about the impact of the trade war with China roiled technology and industrial shares. The broad selloff took the S&P 500 to the lowest in three months, the Dow Jones Industrial Average plunged as much as 836 points and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years.

The selloff came a day after the International Monetary Fund said the world economy is plateauing and cut its growth forecast for the first time in more than two years, blaming escalating trade tensions and stresses in emerging markets.

Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies $110 billion of American products. The IMF projections don’t take into account Trump’s threat to expand the tariffs to effectively all of the more than $500 billion in goods the U.S. bought from China last year.

During an event earlier Wednesday amid the sell-off, Trump and his top economic adviser, Larry Kudlow, said they believed the U.S. economy was strong. “It is doing well,” Trump said.