techkenyot.com
techkenyot.com October 16, 2018


U.S. markets drop sharply as investors are spooked by rising rates

11 October 2018, 10:00 | Hattie Nash

U.S. markets drop sharply as investors are spooked by rising rates

President Trump speaks to reporters while departing for travel to Iowa from the White House in Washington

Wall Street extended its losses Wednesday afternoon as markets continued to skid, with the Nasdaq leading the losses. "It's so tight. I think the Fed has gone insane", Trump told reporters shortly after markets closed, as he arrived in Erie, Pennsylvania for a rally.

Japanese stocks plunged by more than three percent Thursday following the worst session on Wall Street for months, as US President Donald Trump said the Federal Reserve had "gone crazy" with plans for higher interest rates. Of the stock market, he said, "Actually, it's a correction that we've been waiting for, for a long time. The Fed increasing rates to me was a sign that the economy was able to stand on its own two feet".

In fact it is his policies that are behind the changes: tax cuts and spending policies are expected to juice the economy, adding to the Fed's justification to raise interest rates, while trade conflicts raise costs for companies, which could hit the bottom line in quarterly earnings - something analysts said helped prompt Wednesday's sell-off.

White House Press Secretary Sarah Sanders issued a statement on the drop as well.

Fed ‘has gone crazy’ as it raises interest rates
Officials expect to hike rates another quarter percentage-point by the end of this year and gradually continue to raise rates at least through 2019.

He adds, "I think the Fed has gone insane".

On Wednesday, the Dow fell 831 points, or 3.1 percent, to 25,598.

Adams said investors have concerns about their future profitability, too, making technology stocks more volatile in the last few months.

There are a slew of worries for investors which have been building in recent weeks.

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"It's probably healthy. This will pass and the U.S. economy remains strong".

The Fed last raised interest rates in September and left intact its plans to steadily tighten monetary policy, as it forecast that the USA economy would enjoy at least three more years of economic growth. An additional 1.5-percentage-point fall would confirm a correction for that index.

Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners, said that although the losses caught him off-guard, he thought many investors were unduly frightened by the rising rates.

Trump was briefed on the market turmoil earlier in the day, a White House official said. The Dow lost more than 550 points in afternoon trading. Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.

Korea admits U.S. ‘discontent’ over military pact with Kim Jong
A South Korean newspaper reported Wednesday that Japan has conveyed to the United States its readiness to host a second U.S.

In other markets, oil prices fell sharply on worries that Hurricane Michael, which is battering the USA state of Florida, will dent demand for gasoline and other petroleum products.



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