Asian markets plunged on Thursday following the worst session on Wall Street for months, as US President Donald Trump said the Federal Reserve had "gone crazy" with plans for higher interest rates.
Ahead of a campaign rally for the United States mid-term elections next month, Trump told reporters: "I think the Fed is making a mistake". "They're so tight. I think Fed has gone insane", president Trump replied.
"It's a correction that we've been waiting for for a long time", he said.
The president took aim at the Federal Reserve, led by Jerome Powell whom he personally chose to lead the bank, after the Dow Jones Industrial Average fell 3%, or more than 800 points, in Wednesday trading - its worst drop in eight months.
Trump has often pointed to stock market records set during his time in office as a measure of his success.
"I think the Fed is making a mistake".
United States shares suffered a broad-based selloff that slashed more than three percent from major indices. "But I think the Fed has gone insane", he went on.
Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies of $110 billion of American products. The IMF projections don't take into account Trump's threat to expand the tariffs to effectively all of the more than $500 billion in goods the US bought from China past year.
USA presidents have rarely criticized the Fed in recent decades because its independence has been seen as important for economic stability.
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Trump has departed from that practice and has said he would not shy from future criticism should the Fed keep lifting rates.
Fed spokeswoman Michelle Smith declined to comment on Trump's remarks.
The benchmark Nikkei 225 dropped almost two percent at the open and extended losses to below the three-percent mark, as traders fretted about surging interest rates and an ongoing trade spat. Powell said last week he expects to stick with the current path of gradual interest-rate hikes while monitoring risks in the economy.
"My assumption for the policy rate is that we can achieve our objective of keeping inflation to the 2 percent symmetric objective and the unemployment rate slowly rising back towards its sustainable rate with that stance of funds rate - but if we need more, we'll do more", he said. The problem I have is with the Fed.
"The fundamentals and future of the U.S. economy remain incredibly strong", press secretary Sarah Sanders said in a statement after the close.
Trump was briefed on the market turmoil earlier in the day, a White House official said.
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 rate hikes.
"The fundamentals and future of the USA economy remain incredibly strong", Sanders said in a statement.