President Trump on Wednesday said the Federal Reserve “has gone crazy” with a series of planned interest rate increases after U.S. stocks suffered their worst daily losses since February.
Trump told reporters on Air Force One that the Fed had raised rates too quickly after being asked his reaction to Wednesday’s massive stock sell-off, according to pool reports.
{mosads}The Dow Jones industrial average dropped 831 points Wednesday afternoon, losing 3.2 percent on the day. The Nasdaq composite fell 4 percent and the S&P 500 lost 3.3 percent as investors sought safe havens from rising interest rates.
“No, I think the Fed is making a mistake. They’re so tight,” Trump said. “I think the Fed has gone crazy. So you can say that, ‘Well that’s a lot of safety actually.’ And it is a lot of safety, and it gives you a lot of margin. But I think the Fed has gone crazy.”
Trump said the Wednesday stock slide was “actually … a correction that we’ve been waiting for for a long time,” but reiterated his frustration with the Fed.
“I really disagree with what the Fed is doing, OK?” Trump said.
Trump has regularly bashed the Fed since July, when he told CNBC he was “not thrilled” with the central bank’s plans to raise interest rates. The president has also criticized Fed Chairman Jerome Powell, who Trump appointed to the position last year, for not keeping rates lower.
The Fed has raised interest rates eight times since 2015 and six times since Trump took office as it seeks to return to neutral monetary policy. The bank must raise rates quickly enough to prevent rampant inflation, but slowly enough to allow maximum sustainable economic growth.
Unlike most Republicans and right-leaning economists who support higher rates, Trump has urged the Fed to keep rates lower to support the strong U.S. economy. The president has said that lower rates will help the U.S. best other nations in trade talks and has downplayed the risks of rapid price increases.
Trump is also sensitive to the movements of the stock market and often touts the sharp jump in equity prices that began shortly after his 2016 election. Higher borrowing costs typically narrow corporate profit margins and dampen investment, pushing traders toward Treasuries and other products seen as safe havens.
Fears over rising interest rates drove much of Wednesday’s sell-off as investors sought to park their money in bonds and less volatile stocks.
Investors also began to pull back from tech stocks that led the bull market of the past decade. Shares of Amazon, Netflix, Facebook, Apple and Twitter all fell sharply throughout the day and suffered some of the heaviest losses.
Updated at 6:19 p.m.