Trump Attacks the Fed as Stocks Fall and the Midterms Loom

Trump Attacks the Fed as Stocks Fall and the Midterms Loom
The Last Apolitical Institution in Washington
About Your Privacy on this Site Welcome! To bring you the best content on our sites and applications, Meredith partners with third party advertisers to serve digital ads, including personalized digital ads. Those advertisers use tracking technologies to collect information about your activity on our sites and applications and across the Internet and your other apps and devices.

By clicking continue below and using our sites or applications, you agree that we and our third party advertisers can:

New York (CNN Business)Just a week ago the Dow was on the cusp of cruising above 27,000 for the first time. Now, its in a scary tailspin.

1 / 2US President Donald Trump blames the Federal Reserve for global stocks declining amid concerns about rising interest ratesUS President Donald Trump blames the Federal Reserve for global stocks declining amid concerns about rising interest rates (AFP Photo/SAUL LOEB)Washington (AFP) – President Donald Trump renewed his attacks on the US central bank on Thursday, saying it was “out of control” in raising interest rates but that he had no plans to dismiss Federal Reserve Chairman Jerome Powell.

The new European data protection law requires us to inform you of the following before you use our website:

Video: Why the Federal Reserve is hiking interest rates

Trump blamed the Federal Reserve for the global stocks rout that continued Thursday for a second day amid concerns about rising interest rates.

“It is a correction that I think it is caused by the Federal Reserve, with interest rates,” Trump told reporters at the White House. “I think the Fed is out of control.”

Earlier in the day, Trump told the Fox & Friends television broadcast that the central bank was “making a big mistake” by being “too aggressive” in raising rates.

The comments followed his strongest criticism of the Fed late Wednesday when he said the central bank had “gone crazy.”

US shares fell sharply on Wednesday as the Dow Jones Industrial Average lost more than 800 points in its worst tumble since February.

The rout caused a domino effect worldwide, with losses spreading to Asia and Europe on Thursday as investors remained concerned about rising rates — which would send more buyers out of equities and into bonds — as well as the impact of Trumps trade conflict with China on corporate profits.

After a roller coaster ride Thursday, the Dow lost another 545 points for a drop of more than two percent. London also lost nearly two percent, Frankfurt fell 1.5 percent, and Tokyo plunged nearly four percent.

White House economic adviser Larry Kudlow on Thursday said Trumps opinions had no weight on the Feds actions.

“We know the Fed is independent. The president is not dictating policy to the Fed. He didnt say anything remotely like that,” he said on CNBC.

And Kudlow said the Fed was managing “the transition from ultra, ultra easy money…to something more normal,” by raising rates gradually.

Trump has repeatedly touted the spate of Wall Street records as proof of the success of his economic program, including his confrontational trade strategy, and criticized the Fed for raising the benchmark interest rate — three times this year — saying it would undermine his efforts.

In fact it is largely his policies that are behind the changes: tax cuts and increased government spending are expected to juice the economy, adding to the Feds justification to raise interest rates.

Meanwhile, trade conflicts raise costs for companies, which could hit the bottom line in quarterly earnings — something analysts said had helped prompt Wednesdays sell-off.

The attacks on the Fed are another example of Trump breaking with recent norms. The Fed is an independent body and presidents in recent decades have avoided commenting publicly on its actions.

“This is just who we are and I think who we will always be, which is, were a group who — were quite removed from the political process,” Powell said in a recent interview.

Raising interest rates was justified “for those economies that are showing much improved growth, inflation that is picking up…unemployment that is extremely low,” Lagarde told a press briefing in Bali, Indonesia where the IMF is holding its annual meeting.


Posted in World