The US President Donald Trump said that yesterday’s sell-out of stock markets was actually a long-awaited adjustment. The president also did not missed to send a new criticism of the Federal Reserve, figuring out the central bank’s actions as “madness”.
“I think … Fed is making a mistake. They are too tight. I think the Fed is crazy”, said Donald Trump.
The US Central Bank raised its interest rates in September and kept its plans unchanged to tighten its monetary policy, predicting that the country’s economy would enjoy at least another three years of growth.
This, however, has led to Trump’s criticism that interest rates are rising too fast.
The rapid rise in US interest rates became one of the reasons for investor concerns that led to the sale of US stocks on Wednesday. In the main indexes Dow Jones and S&P 500 lost more than 3% of their value, while the Nasdaq Composite wiped out over 4%.
Trump denied the effects of the US trade dispute with China.
“Is not that. My problem is with the Fed”, said Donald Trump. According to the president, the sale is a long-awaited adjustment. “It’s actually a correction we’ve been waiting for a long time, but I really do not agree with what the Fed does”, added he.
The US Treasury Secretary Steven Mnuchin also said that decreases on the market are an adjustment, and the fundamentals of the US economy remain “extremely strong”.
“The fact that there is some correction, considering what growth the market has noted, is not particularly surprising”, said Steven Mnuchin.
A stock market correction is defined as at least a 10-percent drop from the highest value in the past 52 weeks. To get there – despite the sale on Wednesday, the S&P 500 will have to double its losses. The index fell by nearly 5% of its highest value at the end of a session on September 20th.
The Nasdaq, for its part, dropped by 8.5% from its record on August 29.