Trump says he knows economy better than Federal Reserve chair

Trump says he knows economy better than Federal Reserve chair

Trump says he knows economy better than Federal Reserve chair

It was the third consecutive day that Mr. Trump had criticized the Federal Reserve for raising interest rates; last night in Erie, Pennsylvania, the President said the Fed 'has gone insane'. "I think that's really what it was about", Mnuchin said, adding that Fed chair Jerome Powell is "doing a good job". But he downplayed the first major drop in months, saying it was a "correction that we've been waiting for".

Trump has often pointed to stock market records set during his time in office as a measure of his success. As big U.S. companies give updates in the coming weeks on how much they earned during the summer, investors will listen as CEOs say how much of an impact they're seeing from higher rates. Of course, when interest rates go up, the cost of borrowing money goes up for both businesses and consumers, making more expensive purchases less likely, thus slowing down the economy, which has otherwise been booming during Trump's presidency.

On Oct. 11, Owen was again interviewed about interest rates by American Public Media's Marketplace reporter Kimberly Adams for a segment titled Here's how the Federal Reserve determines the inflation rate.

What precipitated Trump's remarks was that the Federal Reserve - America's central bank - has increased interest rates three times just this year. As interest rates go up, bonds, not equities, are starting to look more attractive to investors.

The Fed traditionally remains outside the purview of the President, though Trump has at moments blurred the lines by commenting on Fed policy.

Trump, who departed for Erie just before markets closed on Wednesday, was briefed by officials about the sell-off.

The US stock market sell-off last night saw the S&P 500 and the Dow marking their biggest daily declines since February 8 with technology stocks at the centre of the falls.

"In the absence of a specific trigger, investors are now voting with their feet due to mounting concerns around trade tensions and the impact on global growth, higher interest rates in the USA, and a potential rotation away from equities due to rising bond yields", said Richard Hunter, head of markets at Interactive Investor.

Destructive Hurricane Michael onshore, approaching Southern Georgia
In Panama City Beach, a building that was still under construction didn't stand a chance against Michael. The most likely cause for such sudden changes? More than 40,000 people lost power across the state.

Similarly, every time the Fed raises rates, the cost of interest on our debt and the cost of running the US government goes up dramatically thus reducing available money to spend on infrastructure and salaries of government employees.

The median forecast of FOMC officials in September called for interest rate increases to continue into 2020, rising from 3.1% at the end of 2019 to 3.4% at the end of 2020.

Trump has said in the past that he was "not thrilled" with the rate hikes and reportedly told donors at a fundraiser that Fed Chairman Jerome Powell had not been the "cheap money" banker he hoped for.

"It's a correction that I think is caused by the Federal Reserve with interest rates". "The Fed is going loco".

Forecasters with Macroeconomic Advisers left their outlook for annualized gross domestic product growth unchanged at 3.7 percent for the third quarter and 2.6 percent for the fourth quarter.

By historic standards, interest rates remain low.

Also key, though it can be hard when stocks are swinging wildly: If you're investing for the long-term, don't get caught up in the market's daily up and downs.

"Interest rate put aside, the Sino-US trade spat is to blame for the October market rout because people are anxious the friction would evolve into a political confrontation", Guangzhou Wanlong Securities said in a research note.

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