Global stocks tumble after Trump 'crazy' Fed comment

Daniel Fowler
October 11, 2018

President Trump placed the blame on the Federal Reserve's interest rate hikes for driving a selloff in the stock market Wednesday, saying the central bank "has gone insane".

"I think it's good", Trump said of the stock decline.

Reporters asked the president as he deplaned in Erie, Pennsylvania, if he was concerned about Wednesday's market selloff.

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

Adams said investors have concerns about their future profitability, too, making technology stocks more volatile in the last few months.

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 United States central bank.

He has frequently criticized 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". Netflix was down more than 8 percent, Amazon was off 6 percent and Apple and Google were both down more than 4.5 percent.

At least 5 killed in heavy rains in Spain’s Mallorca
Two more local people were killed in the town, along with a further victim, who died in the town of S'illot. Lawmakers held a minute's silence before the weekly prime minister's question time on Wednesday morning.

The Dow Jones industrial average dropped 2.2 percent, or more than 550 points.

Last week's jump in yields followed strong USA data but many analysts have been anticipating dynamics in the bond market to change due to expectations that central banks in Europe and Japan will soon phase out bond-buying programmes.

Stocks have been under pressure since the yield on 10-year US Treasury bonds jumped above three percent last week, a sudden move that raised fears of an overheating economy, speeding inflation and more aggressive Federal Reserve interest rate increases.

The central bank's preferred measure of inflation is roughly at policy makers' 2 percent objective, and Powell said last week that "the outlook of forecasters inside and outside the Fed is for more of the same".

Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners, said that although the sell-off caught him off-guard, he thought many investors were unduly frightened by the prospect of rising rates. "But I really disagree with what the fed is doing. OK?"

The sell-off came a day after the International Monetary Fund said the world economy is plateauing and cut its growth forecast for the first time in more than two years, blaming escalating trade tensions and stresses in emerging markets. Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.

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