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". "It's so tight. I think the Fed has gone insane", Trump told reporters shortly after markets closed, as he arrived in Erie, Pennsylvania for a rally.
"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.
Reporters asked the president as he deplaned in Erie, Pennsylvania, if he was concerned about Wednesday's market selloff. A stock market correction is defined as a decline of at least 10 percent from the high point of the past 52 weeks, suggesting that major US indices have further to fall.
The steep drop in Asia followed a decline on Wall Street of almost 830 points, the biggest fall since February, amid Trump's latest criticism of the Federal Reserve, the U.S. central bank. "It's all about investors rethinking their exposure to stocks".
The broad USA stock market sell-off Wednesday took the S&P 500 to the lowest in three months, the Dow Jones Industrial Average plunged as much as 836 points and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years.
"No I think the Fed is making a mistake", he said.
Higher interest rates tend to moderate economic growth and makes borrowing more expensive for the US government as well as businesses and consumers. The Dow Jones Industrial average fell 3.15 percent; the tech-heavy Nasdaq index dropped 4.08 percent.
President Trump, who has claimed much of the credit for the strong economy, has criticized the Fed's pace of raising interest rates, saying going too fast could slow growth and job creation.
Trump has previously voiced his displeasure with the Fed's rate hikes, saying he would rather shift his focus to the continued growth of the US economy and creating more jobs. Economists generally agree that in order to prevent runaway inflation, the Federal Reserve can raise interest rates to restrain the money supply.
"The Fed continues to flood the market with United States dollars", he said in one tweet.
"It's shifting the tectonic plates", said Jack Ablin, chief investment officer at Cresset Wealth Advisors. "But I really disagree with what the Fed is doing, okay?" Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.