USA stock markets flirt with end of historic rise

Trump is displayed on a computer Monday on the floor of the New York S

Trump is displayed on a computer Monday on the floor of the New York S

Trump said Wednesday that he retained confidence in Powell and the Federal Reserve but that the Fed was increasing interest rates too quickly. This could be worst December for stocks since the Great Depression Not only did the Dow Jones Index (DJI) suffer its worst week since 2008 but the Nasdaq is already in a bear market.

"The only problem our economy has is the Fed", the president said in a tweet.

Small said markets are effectively acting like they're in a bear market situation even though there's no signs of a recession.

Trump has largely laid the blame for economic headwinds on the Fed, openly criticising its chairman, Jerome Powell, whom he appointed.

Yesterday, President Trump encouraged American investors to buy stocks.

As expected, the Fed went ahead and raised interest rates last week, offering only subtle concessions to investors' worries over slowing global growth.

The Treasury secretary spoke to the chief executives of six of the nation's largest banks on Sunday, and released a statement that afternoon saying all had "ample liquidity". For example, stocks were up almost 400 points on Friday but ended the day down more than 400 points. The S&P 500 has lost about 19.8pc from its Sept 20 closing high, just shy of the 20pc threshold that commonly defines a bear market. Adobe rose 3.1 percent to $211.53.

More news: USA envoy optimistic about N. Korea despite latest friction
More news: Ruth Bader Ginsburg has two malignant growths removed from lung
More news: Nick Jonas & Priyanka Chopra Host Second Wedding Reception in India

Trump defended Mnuchin, telling reporters on Tuesday that the Treasury chief is a "very talented, very smart person".

On Monday, a senior Treasury official, who declined to be named, told CNBC that the goal of the call and putting out the statement, was a "prudent, preemptive measure" following last week's market volatility, which saw the Dow experiencing its worst one-week plunge in a decade.

Asian stocks were mixed yesterday after a weekend call by Treasury Secretary Steven Mnuchin to top U.S. banking executives aimed at stemming the market panic which resulted in Wall Street experiencing its worst week in a decade. "So I think it's a tremendous opportunity to buy", Trump said after speaking with United States troops deployed overseas via video conference.

Last week, the central bank hiked rates, infuriating Trump who has ignored the traditional respect for the Fed's independence, calling it "crazy", "out of control" and a greater economic threat than China. Trump nominated Powell a year ago to become chairman.

There are many reasons for this, including a partial government shutdown, uncertainty about rising interest rates and alarm over President Donald Trump's attack on the Federal Reserve.

It is unclear whether Trump actually has the power to dismiss Powell, but his savagery of the central bank earlier this week saw stock markets plunge.

Sarah Binder, a professor of political science at George Washington University, said it was "ambiguous legally" whether Trump could remove Powell from the chairman role. These rules assess US policy interest rates in terms of economic fundamentals, namely the deviation of USA inflation from its 2% target and the Congressional Budget Office (CBO) measure of the output gap.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.