Trump calls USA stock sell-off 'a correction'

Trump calls USA stock sell-off 'a correction'

As the Federal Reserve tightens monetary policy with its steady pace of interest rate hikes, President Donald Trump continues to criticize the central bank.

"I don't like it", Trump said Tuesday at the White House, referring to the Fed's rate hikes, the most recent of which was September 26. "The Fed has gone insane", Trump said.

A stock market correction is defined as a decline of at least 10% from the high point of the past 52 weeks, suggesting that major United States indices have further to fall.

The Dow Jones dropped by more than 800 points on Wednesday in one of the worst days for the stock market since February, and President Donald Trump had an explanation ready when asked by reporters.

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".

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.

"I don't think it's that at all", he said.

The Fed, which is statutorily independent of the executive branch, has not faced significant political pressure in many decades, although the Richard Nixon administration is on record as having a heavy hand over the Arthur Burns-run Fed in the 1970s. "The trade war with China, we're taking in billions of dollars in tariffs from China, from Chinese goods, and it hasn't hurt us at all".

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Trump's public criticism of the Federal Reserve, whose chairman, Jerome Powell, Trump appointed, is a sharp departure from his recent predecessors.

Fed spokeswoman Michelle Smith declined to comment on Trump's remarks.

The current benchmark interest rate is 2 to 2.25 percent.

USA consumer price inflation is now above 2 percent annually and the unemployment rate is the lowest in about 40 years.

"The fundamentals and future of the United States economy remain incredibly strong", press secretary Sarah Sanders said in a statement after the close.

"The fundamentals and future of the US economy remain incredibly strong", Sanders said in a statement. He has repeatedly criticised the central bank for raising interest rates this year, decisions aimed at preventing the economy from overheating. "President Trump's economic policies are the reasons for these historic successes and they have created a solid base for continued growth".

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

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