On Wednesday US President Donald Trump lambasted the US Federal Reserve once again, complaining that the Fed has gone "crazy", but the president also reversed tack and called the current stock market sell-off a "correction", one that the administration has been "waiting for". "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.
"I think the Fed has gone insane".
The president took aim at the Federal Reserve, led by Jerome Powell who he chose as chair, after the Dow Jones Industrial Average fell 3%, or more than 800 points, in Wednesday trading - its worst drop in eight months.
Trump has often pointed to stock market records set during his time in office as a measure of his success.
The turmoil on stock markets came a day after the International Monetary Fund slashed its global growth forecast on worries about trade wars and weakness in emerging markets. The IMF projections don't take into account Trump's threat to expand the tariffs to effectively all of the more than $500 billion in goods the US bought from China a year ago. Presidents for more than two decades had avoided public comments on the Fed's interest-rate policies as a way of demonstrating respect for the institution's independence.
Fed spokeswoman Michelle Smith declined to comment on Trump's remarks.
"Clearly stocks are spooked by higher rates and maybe some inflation that seems to be creeping in", said Michael Farr, CEO of Farr, Miller & Washington.
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 U.S. central bank.
White House Press Secretary Sarah Huckabee Sanders said in a statement following the close of markets that the USA economy is "incredibly strong" despite the sell-off.
Last week's jump in yields followed strong USA data but many analysts have been anticipating a change in the dynamics in the bond market due to expectations that central banks in Europe and Japan will soon phase out bond-buying programmes.
The Fed has been raising interest rates gradually since December 2015, and last month lifted its target for short-term rates to a range of 2 per cent to 2.25 per cent, responding to an economy that has been growing at a pace well above what Fed officials believe is sustainable.
"I like low interest rates", Trump said.