On Wednesday, the U.S President Donald Trump hit out at the Federal Reserve. He blamed them of “going loco” over interest rate hikes during the current year. He expressed his feelings just hours after the worst U.S stock market sell-off since February. Trump said in an interview on Fox News that the market plunge was not because of his trade conflict with China, instead blaming the U.S central bank. He said, “That wasn’t it. The problem I have is with the Fed”. “The Fed is going wild. They’re raising interest rates and it’s ridiculous. The Fed is going loco”.
Trump added: “They’re so tight. I think the Fed has gone crazy”. Trump appeared to criticize the Fed for a stock rout that market analysts mostly attributed to fresh concern regarding his trade war with China. The broad U.S stock market sell-off on Wednesday took the S&P 500 to the lowest in 3-months. The Dow Jones Industrial Average plunged as much as 836 points. The Nasdaq 100 Index tumbled more than 4% for its worst day in 7 years.
The sell-off came a day after the IMF said the world economy was plateauing and cut its growth forecast for the first time in more than 2-years, accusing escalating trade tensions and stresses in emerging markets. Trump has slapped tariffs on $250bn in Chinese goods during the current year. Beijing has retaliated with levies of $110bn of American products. The IMF projections don’t take into account the president’s threat to expand the tariffs to effectively all of the more than $500bn in goods the U.S bought from China last year. Trump has been publicly criticizing the Fed-led by Chairman Jerome Powell.