At IMF-World Bank meetings, Powell praised as Trump calls Fed 'crazy'

The stock market took a massive dive today – here’s how Trump explained what happened

Trump Calls Stock Sell-Off 'A Correction,' Says Federal Reserve is 'Crazy'

President Trump said that the Federal Reserve has "gone crazy" on short-term interest rates, marking his latest swipe at policy makers in reaction to the stock market's tumble on Wednesday.

"I don't think there was any new news that came out of the Fed today that wasn't there beforehand", Mnuchin said Thursday morning in an interview in Bali, Indonesia.

While Trump said rising rates after years near zero are "good for people with money in the bank and now they can get interest on their money for first time in a long time", he insisted Thursday Fed was "making a mistake".

"Sentiment does remain fragile, having been initially a reaction to the sudden rise in U.S. bond yields, the selling has taken on a broader risk-off guise", warns Neil Wilson, chief markets analyst at Markets.com.

"The fundamentals and future of the USA economy remain incredibly strong", Sanders said in a statement. That was lower than economists' estimates, and pretty much in line with the Fed's two-per-cent target.

Finally, investors might want to look at how the Fed is thinking about the assumed relationship between low unemployment, rising wages, inflation and monetary policy. "They are going to do what they are going to do". Hikes have been right this year, but it is also very clear that a too aggressive rate hiking cycle (more than three hikes over the coming year) will likely send the U.S. economy into recession. USA stocks opened lower on Thursday but seesawed between losses of as much as a percentage point and small gains.

Over the past three years, the Fed has raised rates eight times. "I think the Fed is out of control". The Fed is going wild. As big USA companies give updates in the coming weeks on how much they earned during the summer, investors will listen as CEOs say how much of an impact they're seeing from higher rates. "The problem in my opinion is Treasuries and the Fed".

Both Powell and the president confirmed in recent days that they have not spoken to each other about interest rates.

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Those policies are all seen as initiatives of the crown prince, who has also presided over a roundup of activists and businessmen. The threats mark a surprising turn in the otherwise warm relationship between Trump and Saudi crown prince Mohammed bin Salman .


Some of his former advisers said they believed Trump's criticisms of the central bank were warranted.

His comments follow a volatile day of trading in the stock markets.

Conversely, some worry that the central bank might even raise rates faster than it otherwise would, to demonstrate the independence of its inflation-fighting policy.

That's what happened earlier this year when Treasury rates spiked, briefly spooking the market before cooler heads prevailed.

Add it all up, and it means the world's most savvy investors are betting that the USA 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.

The yield on the United States benchmark 10 year treasury bond hit its highest level since 2011 this month, which rattled investors in North American equities.

Recent data showed the economy expanded an annualized real 4.2 percent in the April to June period, the highest rate of growth in nearly four years, while the unemployment rate hit 3.7 percent in September, the lowest level in almost 49 years.

And the housing sector is especially sensitive to the longer-term interest rates set on the bond market, which in turn determine mortgage rates.

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