Global stocks tumble after Trump 'crazy' Fed comment

Lloyd Doyle
October 11, 2018

With significant drops in the Dow Jones Industrial Average, S&P 500, and broad-based stock market indexes, President Trump said markets are in a "correction", and decried the Federal Reserve's recent rises in interest rates and signals for more to come.

"Actually it's a correction that we've been waiting for for a long time, but I really disagree with what the Fed is doing", Trump told reporters before a political rally in Pennsylvania.

Currency investors took shelter in the safe-haven yen, resulting in steep losses for Japanese exporters, with electronics giant Sony down almost five percent as blue-chip firms flashed red across the trading board.

They include the United States 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.

Bourses in Paris and Frankfurt both lost more than two percent, while London fell 1.3 percent.

The broad USA stock market sell-off Wednesday 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.


He said he didn't think the current rate of U.S inflation merits higher borrowing costs. "It's all about investors rethinking their exposure to stocks".

Trump has previously voiced his displeasure with the Fed's rate hikes, saying he would rather shift his focus to the continued growth of the US economy and creating more jobs.

Fed Chairman Jerome Powell is aiming to extend the second-longest USA 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.

He has frequently criticised the U.S. central bank for gradually raising interest rates, and on Wednesday reiterated his position: "I really disagree with what the Fed is doing". "The Fed has gone insane".

Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners, said that although the losses caught him off-guard, he thought many investors were unduly frightened by the rising rates.

"I believe this selling is an overdone panic", Feinseth said. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.

Other reports by Iphone Fresh

Discuss This Article

FOLLOW OUR NEWSPAPER