President Trump placed the blame on the Federal Reserve's interest rate hikes for driving a selloff in the stock market Wednesday, saying the central bank "has gone insane".
"I think the Fed is making a mistake", Trump said to reporters after landing in Erie, Pennsylvania, for a campaign rally on Wednesday. "They're so tight. I think Fed has gone insane", president Trump replied. A stock market correction is defined as a decline of at least 10 percent from the high point of the past 52 weeks, suggesting that major USA indices have further to fall.
USA stocks took their worst loss in eight months Wednesday, with the Dow Jones Industrial Average sinking 831 points and the Nasdaq composite logging its biggest loss in more than two years.
Trump has often pointed to stock market records set during his time in office as a measure of his success.
"I really disagree with what the Fed is doing", Trump said.
Trump previously criticized the Fed for allowing too much money into the economy in several tweets from 2011, before he became the president. "I think we don't have to go as fast".
Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies $110 billion of American products.
The steep drop in Asia followed a decline on Wall Street of almost 830 points, the biggest fall since February, amid Trump's latest criticism of the Federal Reserve, the USA central bank.
Fed spokeswoman Michelle Smith declined to comment on Trump's remarks. Powell said last week he expects to stick with the current path of gradual interest-rate hikes while monitoring risks in the economy.
"Clearly stocks are spooked by higher rates and maybe some inflation that seems to be creeping in", said Michael Farr, CEO of Farr, Miller & Washington.
The White House said Wednesday that the "fundamentals and future" of the USA economy are "incredibly strong" despite the big losses in the stock market.
The markets have been on a historic climb - with the Dow and S&P each notching dozens of new highs since 2016 - buoyed by a strong US economy and solid corporate earnings. The Fed is expected to raise interest rates at least three times in 2019, up from the two hikes that it forecasted in December.
During an event earlier Wednesday amid the sell-off, Trump and his top economic adviser, Larry Kudlow, said they believed the US economy was strong.