President Donald Trump signaled his fears about the Federal Reserve’s plans to continue to allow interest rates to rise through 2019, despite the stock market’s plunge on Wednesday, as reported by Business Insider.
After landing in Erie, Pennsylvania, for a campaign rally on Wednesday, Trump spoke to reporters, saying, “I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy.”
Speaking about the stock market drops, which saw the Nasdaq Composite index dip by more than 4 percent and the Dow Jones drop 800 points, Trump said, “It’s a correction that we’ve been waiting for for a long time. But I really disagree with what the Fed is doing.”
The Federal Reserve recently increased interest rates for the third time in 2018, but for only the eighth time in the decade since the global financial crisis. Experts predict that the rates will be raised once again before the end of the year. It is also predicted that the Federal Reserve will raise interest rates three times in 2019, more than original two that was announced last December.
Trump hasn’t been quiet about the Fed’s decision to hike interest rates so often, saying they did not “have to go as fast.” His criticism of the Federal Reserve breaks a long-held tradition of presidents avoiding commenting on the actions of the Fed in order not to improperly influence the markets.
'The Fed has gone crazy': Trump rails against Federal Reserve over rate hikes amid market plunge https://t.co/vCBsAKAM2x
— Politics Insider (@Politicsinsider) October 10, 2018
According to reports by Market Watch, most analysts are doubting that Trump’s comments will have much of an impact on the market. Instead, they feel that this is the adjustment that has been coming, after the American economy has spent much of 2018 surging forward despite the global shift in the economic cycle and the drop in prices of global equities and currencies
“This week has seen the S&P, and the Nasdaq, sit up and pay attention to what’s going on,” said Kit Juckes, global macro strategist at Société Générale. “The president’s criticism of the Fed adds color, but no real substance to the situation. It has long been assumed by market participants that when global market malaise finally transfers to the U.S., the Fed will pay attention and the dollar’s rally will start to run out of steam.”
Trump has strongly associated the bullish stock market with his presidency, something many presidents were reluctant to do as they would also be given the blame for any downturn. The president also made clear that his trade war with China had no impact whatsoever on the economy’s drop.