President Donald Trump said the Federal Reserve “has gone crazy”, blaming the central bank’s interest rate hikes for the Dow’s more than 800-point drop Wednesday.
"The Fed has gone crazy,” Trump told reporters in Pennsylvania, where he is holding a campaign rally.
“No, I think the Fed is making a mistake," Trump said. "They’re so tight.”
This is not the first that Trump has criticized the Federal Reserve. Earlier this week, the president said he believes inflation is in check and doesn’t like the bank’s approach:
“I like to see low interest rates,” Trump said. “The Fed is doing what they think is necessary, but I don’t like what they're doing.”
But Trump’s own policies are at least partially to blame for the Fed’s activity: his tax cuts and tariffs have served to spur inflationary pressures on the economy.
The Federal Reserve raised U.S. interest rates for the third time this year, in a bid to prevent inflation from surging as President Donald Trump's tax cuts fuel economic growth.
The central bank's monetary-policy committee, led by Chairman Jerome Powell, raised rates by 0.25 percentage point to a range between 2% and 2.25%, according to a statement Wednesday.
Trump’s trade policy also plays a role in interest rate hikes. Writing for Forbes, Patrick Watson said the most likely scenario to play out with the Trump-China trade war is a long stalemate.
Each government will wait for the other one to break.
That means the U.S. will see price inflation long before it sees outsourced manufacturing return from abroad.
Inflation plus higher interest rates will further strengthen the U.S. dollar. This will make our exports more expensive and encourage other countries to find alternative suppliers.