Trump calls Fed 'only problem' in U.S. economy; markets slump - Ester Holdings

Trump calls Fed ‘only problem’ in U.S. economy; markets slump

WASHINGTON (Reuters) – President Donald Trump blasted the Federal Reserve on Monday, describing it as the “only problem” for the U.S. economy, as top officials convened to discuss the growing rout in stock markets caused in part by the president’s attacks on the central bank.

Stocks fell again on Monday amid concern about slowing economic growth, the government shutdown and reports that Trump had discussed firing Federal Reserve Chairman Jerome Powell, whom he has repeatedly criticized for raising interest rates.

U.S. stocks have dropped sharply in recent weeks on concerns over weaker economic growth. The S&P 500 index .SPX was on pace for its biggest percentage decline in December since the Great Depression.

In a tweet that did nothing to ease market concerns about the Fed’s cherished independence, the Republican president laid the blame for economic headwinds firmly at the feet of the central bank.

“The only problem our economy has is the Fed. They don’t have a feel for the market,” Trump said on Twitter. “The Fed is like a powerful golfer who can’t score because he has no touch – he can’t putt!”

A crisis call on Monday between U.S. financial regulators and the Treasury Department did more to rattle markets than to assure them.

All three major indexes ended down more than 2 percent on the day before the Christmas holiday. The S&P 500 ended down about 19.8 percent from its Sept. 20 closing high, just shy of the 20 percent threshold that commonly defines a bear market.

Oil prices followed equities down, tumbling more than 6 percent to the lowest level in over a year.

Treasury Secretary Steven Mnuchin hosted a call with the president’s Working Group on Financial Markets, a body known colloquially as the “Plunge Protection team,” which normally only convenes during times of heavy market volatility.

Regulators on the call said they were not seeing anything out of the ordinary in financial markets during the recent sell-off and also discussed how they will continue critical operations during the partial government shutdown, according to two sources familiar with the matter.

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