Global stocks tumble after Trump 'crazy' Fed comment

The Federal Reserve is not pleasing President Trump with its policy on interest rate increases

The Federal Reserve is not pleasing President Trump with its policy on interest rate increasesGETTY IMAGES

Trump, who has been critical of the central bank's interest rate increases, tells reporters after landing in Erie, Pennsylvania, that he thinks "the Fed is making a mistake". "But I think the fed has gone insane".

Rising bond yields have been drawing investors out of the stock market, and the best-performing stocks over the past year took some of the biggest losses on Wednesday.

Money Map Press chief strategist Keith Fitz-Gerald, Fox Business correspondent Kristina Partsinevelos and Capital Wave forecast editor Shah Gilani discuss President Trump's criticism of the Federal Reserve.

Wall Street stocks plummeted Wednesday amid worries about surging USA interest rates and the impact of trade disputes, as President Donald Trump blamed the Federal Reserve, saying it had "gone insane".

Trump has repeatedly touted Wall Street records as proof of the success of his economic programme, including his confrontational trade strategy.

But he's also calling the drop "a correction we've been waiting for for a long time".

He said he didn't think the current rate of U.S inflation merits higher borrowing costs.

The rout in U.S. shares followed substantial losses on European bourses, due in part to tensions between Brussels and Rome over Italian budget plans that have revived fears about the eurozone.

White House Press Secretary Sarah Huckabee Sanders said in a statement following the close of markets that the USA economy is "incredibly strong" despite the sell-off. The S&P 500 was down 1.9 percent, and the tech-heavy Nasdaq saw losses of 2.3 percent. "It's all about investors rethinking their exposure to stocks".

Trump's comments echo his previous criticisms of recent months, which broke more than two decades of White House tradition of avoiding comments on monetary policy out of respect for the independence of the US central bank.

Those 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.

Earlier on Tuesday, White House economist Kevin Hassett said the administration respects the Fed's independence and pointed to Trump's nominees to the central bank as evidence of its non-partisan approach to the setting of monetary policy.

In other markets, oil prices fell on worries that Hurricane Michael will dent demand for gasoline and other petroleum products.

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