Trump calls United States stock sell-off 'a correction'

Roman Schwartz
October 12, 2018

'It is a correction that I think it is caused by the Federal Reserve, with interest rates, ' Trump told reporters at the White House.

The Dow Jones stock market average dropped by 831 points, which is 3.15 percent of its opening value on Wednesday.

During panel discussions at the International Monetary Fund's annual meetings in Bali, Indonesia on Thursday, South African Reserve Bank Governor Lesetja Kganyago stressed the importance of central bank independence when he was asked whether Trump's comments demean the integrity of the institutions.

Fed spokeswoman Michelle Smith declined to comment on Trump's remarks. Three have PhDs in economics and three have law degrees. "But I think the Fed has gone insane", he went on. "I don't think the USA can hold in there", the chief investment officer of bond manager DoubleLine Capital told CNBC. If you look at their economy now, it's a whole different ball game. That comes after a big tax cut enacted last December.

He reiterated those comments during an interview on Fox & Friends Thursday morning, claiming the central bank was being too "aggressive".

Investors are leaning into safer stocks with steady dividends - utilities and consumer staples - and pulling out of the higher-paying, higher-risk stocks as other guideposts of growth, like the communication sector, tumbled.

The current benchmark interest rate is 2 to 2.25 percent. "That suggests the Fed will keep raising rates, and that's taking the wind out of the stocks that have done the most, particularly in the tech sector".

From its beginning, the Fed was created to insulate it from political pressures.

The Republican president told the presenters: "They're [Fed bankers are] making a big mistake".

NASA staff working 24/7 to deal with Hubble space telescope issues
The telescope could work with as few as one or two gyroscopes, although that leaves little room for additional breakdowns. One of the standard gyros failed, making all three of the standard variety unusable, according to the space agency.

"And we just try to do the right thing for the medium and longer term for the country".

But a fall would be a concern to the president, who frequently cites stock market performance as a sign of his administration's success. It is also expected to raise rates again by the end of the year. "The Fed is going loco and there is no reason for them to do it and I'm not happy about it".

In July, the president complained about the Federal Reserve raising interest rates.

A spike in Treasury yields and solid USA economic data have sparked concerns that the Federal Reserve may pick up the pace of its interest rate hikes. "That doesn't seem especially surprising".

Carney also praised Fed Chairman Jerome Powell's technocratic expertise.

With the Fed slowly unwinding quantitative easing - as it should be doing, since the financial crisis is long past - it makes sense that long-term Treasury securities are breaking through their artificially low yield levels. "The Fed has gone insane", Trump said. We've got Donald Trump tweeting about whatever crosses his mind at a given moment; we've got the news media and the political world reacting to Trump and to each other, consuming vast amounts of intellectual oxygen; we've got outrage and ranting emanating from all over the political and geographical maps.

He has frequently criticised the United States central bank for gradually raising interest rates, and on Wednesday reiterated his position: "I really disagree with what the Fed is doing". "Where is the inflation that they are fighting?"

Analysts attribute some of the recent share price declines to sales by investors anxious that trade tensions will hurt growth, while trade tariffs and rising interest rates raise costs for businesses.

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