Trump calls stock selloff 'a correction,' says Federal Reserve is 'crazy'

Lloyd Doyle
October 11, 2018

U.S. President Donald Trump said that Wednesday's stock market sell-off was in fact a long-awaited "correction", and that the Federal Reserve, which has been raising U.S. interest rates, had gone "crazy".

"The Fed is making a mistake", he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally.

"I think the Fed has gone insane", President Donald Trump said.

But he downplayed the first major drop in months, saying, "it's a correction that we've been waiting for a long time".

"I really disagree with what the Fed is doing", Trump said.

'As stocks go up, tech goes up more than the stock market.

In Europe this week, the closely-watched spread between the rates on 10-year bonds in Italy compared with those offered by Germany, which is a measure of the added risk perceived by investors to holding onto Italian debt, hit the highest level since April 2013.

The Dow Jones Industrial Average has plunged more than 800 points, its worst drop in eight months, led by sharp declines in technology stocks.

China Mobile shares fell 3.7%, insurance group Ping An dropped 4.1% and China Construction Bank lodged a slide of 3.2%.


"Clearly stocks are spooked by higher rates and maybe some inflation that seems to be creeping in", said Michael Farr, CEO of Farr, Miller & Washington.

Those financial crisis-inspired programmes - such as quantitative easing - are now ending and the Fed has raised U.S. interest rates three times already this year - raising borrowing costs - and could add a fourth hike by the end of 2018.

At market close on Wednesday, the Dow (^DJI) lost 3.15%, or 831.83 points, and the S&P 500 (^GSPC) fell 3.29%, or 94.66 points.

She said in addition to rising interest rates, investors also fear that company profit margins will be squeezed by rising costs, including the price of oil.

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

"As concerns increase over higher interest rates dampening growth, investors are evolving their trading strategies accordingly".

"It's shifting the tectonic plates", said Jack Ablin, chief investment officer at Cresset Wealth Advisors. The problem I have is with the Fed. Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.

On Friday, federal data showed that the US jobless rate fell to 3.7 percent in September, its lowest point since 1969. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.

Other reports by Iphone Fresh

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