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President blames ‘out of control’ Federal Reserve’s rate rises
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US markets suffer second day of drops – but selling stemmed in Asia
President Donald Trump has blamed an “out of control” Federal Reserve for sharp drops on global stock exchanges and said he was “disappointed” with the central bank’s chair, Jerome Powell.
Global stock markets fell again on Thursday as investors worried about signs of slowing growth, rising trade tensions and higher interest rates.
However, Asian stocks staged a fightback on Friday, stemming Thursday’s bloodletting. Shares were up in Hong Kong, with the Hang Seng index climbing 1.18% and South Korea’s Kospi index up 1.35%.
Yet shares were down in Tokyo (0.12%) and Sydney (0.12%). The benchmark Shanghai Composite, which fell by as much as 6% on Thursday, was flat on Friday, while the Shenzhen Composite, an index tracking stocks on China’s second exchange, was down 0.32%.
In a sign of possible state intervention, the state-run Securities Times sought to soothe jittery investors by calling for more market-friendly policies from the government in Beijing.
Authorities “should roll out positive measures so that investors know the government cares about the stock market, while listed companies and financial institutions should also contribute to improving market confidence”, it said.
China reported higher than expected export growth on Friday, adding to a trade surplus with the US, which could worsen an ongoing trade war between the two countries. Chinese exports in dollar terms rose 14.5% in September, compared with a year earlier. China’s trade surplus with the US reached a record high of $34.13bn in September, up from $31.05bn the month before, according to Chinese customs data.
In Thursday’s US trade, all the major stock markets closed down after similar drops on Wednesday. The S&P 500, the market benchmark, closed over 2% lower, its sixth straight daily decline. The Dow Jones industrial average fell 2.1%, or 545 points, on top of Wednesday’s 830-point tumble.
The falls came as London’s FTSE 100 index lost close to 2% and in Europe markets ended the day at a 21-month low. That followed sharp corrections across Asia with losses in Australia, China, Japan and South Korea.
US investors are suffering their biggest losses since February which have escalated tensions between Trump and Powell. Powell, who took the Fed’s top job in February, has presided over a series of interest rate rises which have attracted Trump’s criticism.
Trump has been a persistent critic of the Fed’s interest rate policy. On Thursday, he renewed his criticism, blaming the recent downturn in the stock market on the Fed’s rate policy.