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Trump says 800-point market drop is 'a correction that we've been waiting for'

Updated 6:27 AM ET, Thu October 11, 2018

(CNN) - President Donald Trump blamed the Federal Reserve for Wednesday's 832-point stock dive.

"I think the Fed is making a mistake. They're so tight. I think the Fed has gone crazy," Trump told reporters on the tarmac in Pennsylvania.

"It's a correction that we've been waiting for for a long time," he said of the more than 800-point drop.

"I really disagree with what the Fed is doing," Trump said.

The Federal Reserve has steadily tightened monetary policy amid an economic boom in the United States, something Trump has repeatedly criticized.

The President said this week he prefers lower interest rates but added he would not speak directly to his Fed chairman appointee Jerome Powell, preferring instead to remain hands-off.

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

Later on Wednesday in an interview on Fox News, Trump dismissed the idea that trade tensions with China caused the dive.

"I don't think it's that at all," he said. "The trade war with China, we're taking in billions of dollars in tariffs from China, from Chinese goods, and it hasn't hurt us at all. ... No, that wasn't it. The problem I have is with the Fed. The Fed is going wild. I mean, I don't know what their problem is but they're raising interest rates and it's ridiculous."

He added later, "The problem, in my opinion, is Treasury's and the Fed. The Fed is going loco and there's no reason for them to do it and I'm not happy about it."

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

"The fundamentals and future of the US economy remain incredibly strong," press secretary Sarah Sanders said in a statement after the close.

The Dow plunged nearly 832 points on Wednesday, the third-worst point decline in history.

All 30 Dow stocks were in the red, sending the index below 26,000 points for the first time in a month. The index fell by more than 3%.

The S&P 500 posted its fifth straight decline, plummeting nearly 3.3%. And tech stocks got hit particularly hard. The Nasdaq dropped more than 4% in the worst percentage decline since June 2016.

Stocks are in the midst of a scary October slump, sliding sharply because investors are worried about rising interest rates.


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