Rate futures market says Fed is all but done with hikes

The setting sun illuminates clouds behind the White House during a partial federal shutdown Dec. 22 2018 in Washington

Stocks fell sharply on Monday amid concern about slowing economic growth, the government shutdown and reports that President Donald Trump, increasingly angry about the US central bank's rate hikes, had discussed firing Fed Chairman Jerome Powell.

The stock market was only open for half a day Monday, and that was more than enough time for the Dow Jones Industrial Average to drop 2.9 percent to 21,792.20. The blue chip Dow Jones Industrial Average finished at 21792.20, down 653.17 or -2.66% and the NASDAQ Composite Index closed at 6192.92, down 140.08 or -1.93%.

The S&P 500 fell 2.7 percent and remained on course to record its largest percentage decline in the month of December, while the Nasdaq slid 2.2 percent. The Russell 2000 index of smaller-company stocks gave up 25.16 points, or 2 per cent, 1,266.92.

Trump has singled out his handpicked chairman of the Fed, Jerome Powell, for blame, insisting that the bank's interest rate hikes are responsible for the downturn. Trump has criticized Powell and the Fed for increasing interest rates, subjecting Powell to the kind of scathing public critique that is common for senior Trump appointees but which threatens the political independence of the worlds most powerful central bank.

"[Mr Mnuchin] also confirmed that they have not experienced any clearance or margin issues, and that the markets continue to function properly", the Treasury's statement said.

President Donald Trump renewed his verbal assault against the Federal Reserve on Monday, comparing the central bank to a blundering golfer after the stock market tanked yet again.

Mnuchin denied the reports of Trump seeking Powell's scalp, tweeting on Saturday that the president told him: "I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so".

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Officials estimate about a section of the pier about 30 metres long collapsed, and that it could take months before it's fixed.

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Joseph Shrager, professor and chief of the division of thoracic surgery at the Stanford University School of Medicine. Doctors at Memorial Sloan Kettering hospital in NY performed a lobectomy, removing one of the five lobes of the lung.

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The US Postal Service, busy delivering packages for the holiday season, would not be affected because it's an independent agency. Those being furloughed include almost everyone at NASA and 52,000 workers at the Internal Revenue Service .

Efforts by Treasury Secretary Steve Mnuchin on Sunday to reassure investors backfired.

Asked if he has confidence in Mnuchin, Trump said: "Yes, I do". Typically the markets would have digested such a widely-anticipated hike more easily.

'I have spoken with the President and he said "I totally disagree with Fed policy".

Troise said the Treasury call begs the question of whether Mnuchin has "no idea what he's doing" or if "there actually is a liquidity crisis". Waters said that it was the erratic behavior of the current administration that is causing the volatility in the markets.

Representative Maxine Waters, the top Democrat on the House of Representatives Financial Services Committee, said in a statement that Trump and Mnuchin's actions "have been erratic and are creating uncertainty and instability in the markets".

Despite the government being partially shutdown, Mnuchin left - as planned - for a holiday vacation in Cabo San Lucas. Speaking on Fox News Sunday, Acting Chief of Staff Mick Mulvaney said it was "very possible" that the shutdown could continue into the new year. Defense Secretary Jim Mattis' resignation on Thursday after Trump's surprise decision to pull USA troops out of Syria also unsettled investors.

Closed on Monday (Dec 24) for a national holiday, Tokyo plummeted at the open on Tuesday, suffering its worst finish since April 2017 after a brutal holiday-shortened session on Wall Street that saw United States stocks sink for a fourth straight session.

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