Trump calls 'loco' Federal Reserve 'too aggressive'

After a long stretch of relative calm the stock market has suffered sharp losses over the last week

It has shed 1,378 points over the past two days. The S&P 500, the market benchmark, closed over 2% lower on Thursday, its sixth straight daily decline.

At the closing bell, the Dow Jones Industrial Average was at 25,049.65, down 2.1 percent or 545 points, bringing its losses for the week to more than five percent.

Tiger 21 Chairman Michael Sonnenfeldt told FOX Business' Maria Bartiromo on "Mornings with Maria" Thursday that Trump's "jawboning" of the central bank is "new territory".

US President Donald Trump has said his trade policies have hurt China's economy, adding: "I have a lot more to do".

"I think the Fed is making a mistake", Trump said to reporters after landing in Erie, Pennsylvania, for a campaign rally on Wednesday.

Now, if you discount the trade tension/global slowdown theory for this week's stock selloff - and I wouldn't do that, but let's say you did - then you've got to think that the market is fearing that the Fed will respond to inflationary signals with more hikes than investors previously expected, maybe enough to hurt corporate profits, or dim the US economy into recession, or at least shift capital flows into bond markets at the expense of equities.

Trump on Wednesday slammed the Fed as "going loco" and today said the central bank was "out of control" because it was unnecessarily raising interest rates and causing the stock market to fall. "But I really disagree with what the Fed is doing, okay?" he said.

While he acknowledged that higher rates helped savers, he criticized the Federal Reserve's tactics.

President Donald Trump has intensified his attack on the US Federal Reserve following this week's plunge in stock prices, saying the central bank is "out of control" in raising interest rates, but ruled out firing its head Jerome Powell.

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US stocks tumbled Wednesday the most since February as fresh concern about the impact of the trade war with China roiled technology and industrial shares. By law a president can only fire a Fed chair for cause, not a disagreement in policy.

Kudlow said the Fed was managing 'the transition from ultra, ultra easy money.to something more normal, ' by raising rates gradually.

With inflation barely above two per cent and unemployment at the lowest in a generation, the Fed is expected to tighten once more this year, and three or four times in 2019.

Jones points to the USA 10-year treasury yield's 40-basis point surge since mid-August as evidence that investors see higher rates on the horizon.

"I wonder today whether Trump really has some buyer's remorse with respect to selecting Powell as his Fed chairman, because that was a unusual pick", Moore said. The Fed is an independent body and presidents in recent decades have avoided commenting publicly on its actions.

Powell has brushed off the comments, saying officials do not pay attention to politics.

United States long-dated Treasury yields rose again in extension of a trend over the last few weeks fuelled by solid USA economic data that reinforced expectations of multiple interest rate hikes over the next 12 months. "We just try to do the right thing for the medium- to long-term for the country".

The turmoil on stock markets came after the International Monetary Fund slashed its global growth forecast Monday on worries over the US-China trade war and weakness in emerging markets.

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