US market 'correction' isn't surprising - US Treasury secretary

Kenny Grant
October 11, 2018

President Trump renewed his criticism of the Federal Reserve last night, saying that the central bank was raising interest rates "too fast".

"A lot of people were concerned when the QEs were done whether the Fed would ever be able to downsize and I think the market has handled the supply very well, ' Mnuchin said".

"Actually it's a correction that we've been waiting for a long time, but I really disagree with what the Fed is doing", Trump told reporters before a political rally in Pennsylvania. A stock market correction is defined as a decline of at least 10 percent from the high point of the past 52 weeks, suggesting that major USA indices have further to fall.

"I believe this selling is an overdone panic", Feinseth said.

A spike in Treasury yields and solid USA economic data have sparked concerns that the Federal Reserve may pick up the pace of its interest rate hikes. "It's all about investors rethinking their exposure to stocks."Many of the biggest United States names fell hard in Wednesday's session, with Apple, Boeing and Facebook all slumping more than four percent and Amazon, Nike and Microsoft shedding more than five percent".

The steep drop in Japan followed a decline on Wall Street of almost 830 points, the biggest fall since February, amid Trump's latest criticism of the Federal Reserve, the United States central bank.

He said the rising appeal of bond investments would be a challenge for stocks in the foreseeable future as capital moves out of riskier equities.

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The benchmark Nikkei 225 dropped almost two percent at the open and extended losses to below the three-percent mark, as traders fretted about surging interest rates and an ongoing trade spat. Netflix was down more than 8 percent, Amazon was off 6 percent and Apple and Google were both down more than 4.5 percent.

Fed Chairman Jerome Powell is aiming to extend the second-longest USA economic expansion on record by moving interest rates up just quickly enough to prevent overheating, but not so rapidly that the central bank chokes off growth.

Higher interest rates tend to moderate economic growth and makes borrowing more expensive for the US government as well as businesses and consumers.

In September, the Federal Reserve raised short-term interest rates for the third time this year.

Earlier, Asian markets saw sharp drops as US President Donald Trump said the US Federal Reserve had "gone crazy" with plans for higher interest rates.

Rising bond yields have been drawing investors out of the stock market, and the best-performing stocks over the past year took some of the biggest losses on Wednesday.

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