President Trump calls Fed "crazy"

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Trump said the Fed had "gone crazy" and was being "too aggressive in raising rates", blaming the institution for the market declines that saw the benchmark Dow Jones Industrial Average lose almost 1,400 points in two days.

"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 making a mistake".

But he downplayed the first major drop in months, saying, "it's a correction that we've been waiting for a long time". The Nasdaq Composite index and the Dow Jones dropped more than 4% and 800 points respectively.

Mnuchin said in the discussions he had with the Chinese they had made clear that they did not see a further weakening of the Chinese yuan as being in their interests. Powell said last week he expects to stick with the current path of gradual interest-rate hikes while monitoring risks in the economy.

Not too long ago, Chairman of the Federal Reserve, Jerome Powell said, "The really extremely accommodative low interest rates that we needed when the economy was quite weak, we don't need those anymore".

The Fed traditionally remains outside the purview of the President, though Trump has at moments blurred the lines by commenting on Fed policy.

The gradually rising rates, Fed officials say, are meant to guard against any quick run-up in inflation, while remaining low enough so far for the recovery and a strong run of job growth to continue.

The precipitous fall of the market in previous days has alarmed Trump who had tethered his electoral fortunes to soaring stocks.

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White House Press Secretary Sarah Sanders said in a statement following the close of markets that the United States economy is "incredibly strong" despite the selloff, which analysts attributed in part to trade tensions with China. "But I think the fed has gone insane".

Unusual thing about administration is they crave tax cuts but at the same time they are rising the taxes through tariffs.

In a brief interaction with reporters and later in comments to Fox News, Trump said the U.S. central bank was "too aggressive" in raising interest rates. "The Fed policy of normalization is exactly the appropriate one", said chairman Jacob Frenkel.

Trump is objecting to the Federal Reserve's modest but steady increases in the interest rate, which it raised to 2.25 percent in late September. Now it's stalling, he blames the Federal Reserve for "going loco".

The yield on the 10-year U.S. Treasury note has risen to around 3.1 percent from around 2.1 percent over the past year. The Fed has hiked interest rates three times in 2018 and its dot plot of forecasts suggests more increases will come.

In short, it's hard to see in Powell's speech many signs the Fed is poised to deviate from its steady course toward normalization so as to crush inflation at any sign of labour market tightening or rising wages.

Add it all up, and it means the world's most savvy investors are betting that the US economy will keep growing at a healthy clip, without inflation emerging, but that the Fed will have to keep raising rates well above current levels in order to prevent that inflation.

Larry Kudlow, Trump's top economic adviser, said in a CNBC interview Thursday that he had talked with the president about his Fed criticism and thought "there's nothing new here" in Trump's comments.

Fed named Powell to lead the central bank but can only fire him for cause.

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