Trump calls stock selloff 'a correction,' says Federal Reserve is 'crazy'

President Trump spoke with reporters after arriving at Erie International Airport for a campaign rally at Erie Insurance Arena on Wednesday

The president told reporters Wednesday that he believed the drop was a correction, and that the Federal Reserve Bank was to blame for raising interest rates.

An hour later, Trump was back to calling out the Fed and maintaining they are "making a mistake", making his case once again that the Federal Reserve should stop increasing interest rates.

A spike in Treasury yields and solid USA economic data have sparked concerns that the Federal Reserve may pick up the pace of its interest rate hikes.

President Trump criticizes the Federal Reserve for raising interest rates after the market sell-off.

The FTSE 100 opened 1.5% lower - hovering just above the 7000 point level - following a 1.3% decline on Wednesday while other main European markets dropped by similar levels.

During a rally in Pennsylvania on Wednesday night, Trump said he didn't believe the Fed was accurately adjusting its interest rate policy in line with USA economic data. But he downplayed the first major drop in months, saying it was a "correction that we've been waiting for". "But I really disagree with what the Fed is doing".

On Wednesday, he discounted the stock market's plunge - with the Dow Jones industrial average falling 831 points.

International Monetary Fund (IMF) managing director Christine Lagarde.

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Trump has slapped tariffs on $250 billion in Chinese goods this year, and Beijing has retaliated with levies $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 criticised the Fed in recent decades because its independence has been seen as important for economic stability.

They include the United States trade war with China and its potential impact on global growth, while rising bond yields have diverted attention from equities - stocks - which have been offering the most attractive returns for years because central bank stimulus had flooded markets with cheap money. Powell said last week he expects to stick with the current path of gradual interest-rate hikes while monitoring risks in the economy.

As well as criticising the Fed, Mr Trump said his trade policies had hurt China's economy.

The Fed has raised rates three times this year and is expected to push through another rise by the end of December, with three more planned in 2019.

White House Press Secretary Sarah Sanders issued a statement on the drop as well.

Kevin Hassett, the head of Trump's Council of Economic Advisers, said the president is expressing his views on monetary policy, but he isn't trying to "politicize" the Fed.

Lawler said a more dovish tone from the Fed would go a long way to convince investors that robust US economic growth and strong corporate earnings are here to stay. At just over 2 per cent, the Fed's short-term policy rate remains low by historic standards, and most indexes of borrowing costs and credit flows still regard broader financial conditions as "loose" and conducive to economic growth.

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