Fed has gone crazy, says Trump after stock market ‘correction’

US PRESIDENT Donald Trump said yesterday’s stock market sell-off was in fact a long-awaited “correction”, and that the Federal Reserve, which has been raising US interest rates, has gone “crazy”.

Trump’s use of the word “correction” to describe the sell-off could be significant. A stock market correction is defined as a fall of at least 10pc from the high point of the last 52 weeks.

“Actually it’s a correction that we’ve been waiting for a long time, but I really disagree with what the Fed is doing,” Trump told reporters before a political rally in Pennsylvania. “I think the Fed has gone crazy.”

US stocks tumbled yesterday, with the S&P 500 and the Dow marking their biggest daily declines since February 8, and technology stocks were at the centre of the carnage as rising US Treasury yields sent investors fleeing from risky assets.

US long-dated Treasury yields rose again in extension of a trend over the past few weeks fuelled by solid US economic data that reinforced expectations of multiple interest rate hikes over the next 12 months.

Investors also worried about the impact of trade tensions on corporate profits and Hurricane Michael’s landfall in Florida adding to the uncertainty.

The Nasdaq registered its biggest daily drop since June 24, 2016, hurt by technology stocks which had their biggest one-day drop since August 2011.

The Dow Jones Industrial Average fell 831.83 points, or 3.15pc, to 25,598.74; the S&P 500 lost 94.66 points, or 3.29pc, to 2,785.68 and the Nasdaq Composite dropped 315.97 points, or 4.08pc, to 7,422.05.