Published: Fri, October 12, 2018
Business | By Tara Barton

Trump blames Fed for stock rout, says central bank ‘ridiculous’

Trump blames Fed for stock rout, says central bank ‘ridiculous’

Seoul fell more than 4% and Sydney and Singapore both dropped more than 2.5%. The S&P 500 lost 94 points, or 3.3 percent, to 2,785.

The 10-year yield is now 3.20 percent, the highest in than seven years and up sharply form 2.82 percent in late August.

The sell-off began on Wednesday when the Dow plunged 832 points, or 3.1 percent. It was the second-biggest drop of the year for the blue-chip benchmark after February 5, when it lost over 1,100 points in a single trading session.

Even chief Trump economic adviser Larry Kudlow, qualifying the president's opinion of Fed chair Jerome Powell's Fed, said he thought the central bank was "on target", and that its ability to raise rates was a sign of "economic health, that is something to be welcomed and not feared".

Mr Trump said he was not going to fire Fed chairman Jay Powell, but was just "disappointed" in the bank's policies.

Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks.

The Fed traditionally remains outside the purview of the President, though Trump has at moments blurred the lines by commenting on Fed policy. "He seems to be stepping on the accelerator and brakes at the same time".

Trader Peter Tuchman works on the floor of the New York Stock Exchange Wednesday Oct. 10 2018. The Dow Jones Industrial Average plunged more than 800 points its worst drop in eight months led by sharp declines in technology stocks. (AP
How Sensex lost Rs 4 lakh crore after Donald Trump’s crazy comment

The rout in USA shares followed substantial losses on European stock exchanges, due in part to tensions between Brussels and Rome over Italian budget plans that have revived fears about the eurozone.

'As stocks go up, tech goes up more than the stock market.

In morning trade on Thursday, investors were briefly reassured by a smaller-than-expected rise in inflation.

Analysts attribute some of the recent share price declines to sales by investors anxious that trade tensions will hurt growth, while trade tariffs and rising interest rates raise costs for businesses. Some 30-year fixed-rate mortgages are now offered with an interest rate above 5 per cent, significantly higher than when Trump took office.

Technology and internet-based companies are known for their high profit margins, and many have reported explosive growth in recent years, with corresponding gains in their stock prices. "Suddenly, the market's assumption that the USA corporate sector is an island of stability is coming under greater scrutiny".

Global economic leaders including International Monetary Fund head Christine Lagarde came to the Fed's defense, noting that the independence of monetary policy from the influence of elected officials has become a touchstone of effective economic governance, and helps prevent politicians from using cheap money to further their own interests.

FILE PHOTO: Flags fly above the Federal Reserve building in Washington, DC, U.S., August 22, 2018. -China tensions, the Justice Department announced Wednesday it arrested an official of China's Ministry of State Security on charges of trying to steal trade secrets from USA aerospace companies.

Samsung Galaxy Note 9: US To Get Exclusive Colors
No information regarding this has been given by Samsung so far, however, there are sufficient reports about the colours. In total, we expect four Galaxy S10 phones next year, and three of them were inspected by a Chinese regulatory body .

Like this: