Tuesday, 25 June, 2019

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
Ginger Lawrence | 13 October, 2018, 18:57

President Donald Trump said he won't fire Federal Reserve Chairman Jerome Powell but blamed the us central bank for the worst stock market sell-off since February.

"I think we don't have to go as fast", the president answered to a question about the Fed raising rates by CNBC from the south lawn of the White House.

"It's a correction we have been waiting for a long time", Trump said. "I think the Fed is out of control". His predecessors have taken care not to directly attack the central bank's rate policy out of concern that such criticism could backfire.

Fed Chair Jerome Powell, whom Trump named to lead the central bank, has repeatedly brushed off the comments saying officials do not pay attention to politics.

Asked if he would fire Federal Reserve Chairman Jerome Powell - his own nominee - President Trump told reporters he was not considering such a move. "I think I know about it", he said.

"The Fed has gone insane", he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally.

Trump has said the Fed "has gone insane", and that the Fed was 'going loco' about rising rates.

White House Press Secretary Sarah Sanders said in a statement following the close of markets that the US economy is "incredibly strong" despite the sell-off, which analysts attributed in part to trade tensions with China.

Donald Kohn, who served for eight years on the Fed board, said he thought Trump's criticism would have no effect on Fed policy.

Woman calls police on black man babysitting white children
Parker told The New York Times that Lewis was a family friend and that the children were in no apparent danger. In the videos, Mr Lewis says: "It's 2018". "You see these things, but they're like from a distance", he said.

The yield on 10-year U.S. Treasury bonds reached a seven-year high this week of 3.25 percent (it receded some Wednesday as stocks dropped), up from 2.82 percent in August. Higher interest rates makes it more expensive to borrow money, giving consumers or businesses pause before taking out a loan.

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.

Meanwhile, yields in Europe remain suppressed: the European Central Bank is planning to stop its bond-buying program by the end of this year, but it's not going to start unwinding its $3.8-trillion bond holdings anytime soon.

Stocks are in the midst of a scary October slump, sliding sharply because investors are anxious about rising interest rates.

"They're being too aggressive", Trump said.

Treasury Secretary Steven Mnuchin went to Indonesia this week intending to push President Donald Trump's tough stance on China with United States allies - but found himself once cast as the administration's defender-in-chief.

Finally, investors might want to look at how the Fed is thinking about the assumed relationship between low unemployment, rising wages, inflation and monetary policy.

International Monetary Fund chief Christine Lagarde also defended the Fed on Thursday. There's a case to be made that the Fed should be even more restrained; economist Paul Krugman declared on Twitter, "The problem is that the 2% target is nearly surely too low: the Fed should actually let inflation rise above that level". So it's a great time to be a borrower, and a lousy time to be a saver because Fed policy is tightening at a slow and gradual rate. Economic experts are split on how long the strong economy will continue, and some investors are convinced that a number of stocks - particularly technology companies - are overpriced and were due for a slide.