Dow Jones plunges 800 points as tech stocks tumble

Mae Love
October 11, 2018

President Trump renewed his criticism of the Federal Reserve last night, saying that the central bank was raising interest rates "too fast".

"The Fed has gone insane", he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally. "They're so tight. I think Fed has gone insane", president Trump replied. Of the stock market, he said, "Actually, it's a correction that we've been waiting for, for a long time".

He has frequently criticized the U.S. central bank for gradually raising interest rates, and on Wednesday reiterated his position: "I really disagree with what the Fed is doing".

The tech sector was hit hardest, with Amazon, Apple, Facebook and Netflix all in the red. "But I think the fed has gone insane".

The Dow Jones dropped by more than 800 points on Wednesday in one of the worst days for the stock market since February, and President Donald Trump had an explanation ready when asked by reporters.

"I'm not thrilled because we go up", he explained, "and every time we go up they want to raise rates again, and I don't really - I am not happy about it, but at the same time I'm letting them do what they feel is best".

United States consumer price inflation is now above 2% and the unemployment rate is the lowest in about 40 years.

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"The fundamentals and future of the USA economy remain incredibly strong", Sanders said in a statement.

The President said this week he prefers lower interest rates but added he would not speak directly to his Fed chairman appointee Jerome Powell, preferring instead to remain hands-off.

The Fed has been raising interest rates gradually since December 2015, and last month lifted its target for short-term rates to a range of 2 per cent to 2.25 per cent, responding to an economy that has been growing at a pace well above what Fed officials believe is sustainable.

The current benchmark interest rate is 2 to 2.25 percent.

"It's shifting the tectonic plates", said Jack Ablin, chief investment officer at Cresset Wealth Advisors.

Markets in Paris and Frankfurt both lost more than 2%, while London fell 1.3%.

Trump said Tuesday that the economy is enjoying "record-setting" numbers and "I don't want to slow it down even a little bit, especially when we don't have the problem of inflation". Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73. The index fell by more than 3%. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.

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