US President Trump calls the US Fed 'crazy', stock declines a 'correction'

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US President Trump calls the US Fed 'crazy', stock declines a 'correction'

The Federal Reserve can likely stop raising USA interest rates once they reach about 3 per cent, as long as inflation remains around 2 per cent and the economy is doing well, Chicago Federal Reserve President Charles Evans suggested on Wednesday.

Trump, who has been critical of the central bank's interest rate increases, tells reporters after landing in Erie, Pennsylvania, that he thinks "the Fed is making a mistake".

"The Fed has gone insane", he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally.

He described the path of rate increases - most recently to a level of 2-2.25% - as "crazy", adding that the stock market reaction was the "correction that we've been waiting for".

The Dow Jones Industrial Average plummeted 832 points on Wednesday, recording its largest single-day point drop since February.

Mnuchin declined to comment on Trump's latest attack on the US central bank, though he repeated that the Fed has independence.

"I'd rather pay down debt or do other things, create more jobs, so I'm anxious about the fact that they seem to like raising interest rates". Powell said last week he expects to stick with the current path of gradual interest-rate hikes while monitoring risks in the economy.

On Wednesday, the Dow fell 831 points, or 3.1 percent, to 25,598.

White House Press Secretary Sarah Sanders said in a statement following the close of markets that the U.S. economy is "incredibly strong" despite the selloff, which analysts attributed in part to trade tensions with China.

The Fed last raised interest rates in September and left intact its plans to steadily tighten monetary policy, as it forecast that the US economy would enjoy at least three more years of economic growth.

"Markets are not efficient and markets move in both directions and at times they overshoot in both directions", Mnuchin said early Thursday in an interview on the sidelines of the International Monetary Fund annual meetings in Bali, Indonesia.

Strong economic data and a positive outlook from Fed officials have led to a sell-off in US Treasury bonds, particularly longer-term ones, sparking concerns about even higher interest rates. "President Trump's economic policies are the reasons for these historic successes and they have created a solid base for continued growth".

He has frequently criticized the U.S. central bank for gradually raising interest rates, and on Wednesday reiterated his position: "I really disagree with what the Fed is doing".

During an event earlier Wednesday amid the sell-off, Trump and his top economic adviser, Larry Kudlow, said they believed the US economy was strong.

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