Trump says Fed has "gone crazy" after Dow Industrial Average tumbles

In an unprecedented criticism by a serving US President, Donald Trump said the Federal Reserve has "gone crazy" after the Dow Jones Industrial Average tumbled by over 800 points, the biggest fall in more than seven months.

In a brief interaction with reporters on Wednesday and later in comments to Fox News, Trump said the US central bank was "too aggressive" in raising interest rates.

"I think they're making a big mistake," Trump said on Fox & Friends.

While acknowledging that higher rates helped savers, he criticised the Federal Reserve's moves.

"They're being too aggressive," Trump said.

On Wednesday, when asked about the steep fall of the stock market, Trump said he was not worried about it.

 

"I think the Fed is making a mistake. They're so tight. I think Fed has gone crazy," he said.

"So, you can say that, 'well that's a lot of safety actually. And it is a lot of safety, and it gives you a lot of margin. But I think the Fed has gone crazy," he said.

According to the Wall Street Journal, the Dow industrials extended their steepest October retreat since the financial crisis, posting an 832-point decline that raises fresh concern about the health of the nine-year-old bull market for stocks.

"The Fed's more-restrictive stance has joined with other signals to unsettle investors even as major US indexes rose to new highs," the financial daily said. Along with Dow, the S&P 500 tumbled 3.3 per cent and the Nasdaq composite fell by four per cent.

Trump said the downslide of the stock was in fact a course correction. "Actually, it's a correction that we've been waiting for, for a long time. But I really disagree with what the Fed is doing, okay?" he said.

Later, White House Press Secretary Sarah Sanders said the fundamentals and the future of the US economy remain incredibly strong.

"Unemployment is at a 50-year low, taxes for families and businesses have been cut, regulations and red tape have been slashed, paychecks are getting fatter, consumer and small business confidence are setting records, and farmers, ranchers and manufacturers are empowered by better trade deals," she said.

"President Trump's economic policies are the reasons for these historic successes and they have created a solid base for continued growth," Sanders added.