Fed's interest rate increases 'don't have to go as fast'

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

US President Donald Trump said that last night's stock market sell-off was in fact along-awaited "correction", and that the Federal Reserve, which has been raising US interest rates, had gone "crazy". "The Fed is doing what it thinks is necessary but I don't like what they're doing because we have inflation really checked, and we have a lot of good things happening", Trump said to reporters on the White House lawn before departing for an Iowa event.

"The Fed has gone insane", Mr. Trump told reporters while traveling to Erie, Pennsylvania, for a campaign rally.

He described the path of rate increases - most recently to a level of 2-2.25% - as "crazy", adding that the stock market reaction was the "correction that we've been waiting for".

He has frequently criticized the USA central bank for gradually raising interest rates, and on Wednesday reiterated his position: "I really disagree with what the Fed is doing".

The US stock market sell-off last night saw the S&P 500 and the Dow marking their biggest daily declines since February 8 with technology stocks at the centre of the falls.

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.

As for whether Wednesday's overall market drop could signal an end to broader economic growth, Benedict says there won't necessarily be long-term affects if the markets can stabilize before the losses grow more severe.

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Trump's public criticism of the Federal Reserve, whose chairman, Jerome Powell, Trump appointed, is a sharp departure from his recent predecessors.

The biggest driver for the market over the last week has been interest rates, which began spurting higher following several encouraging reports on the economy.

Bourses in Paris and Frankfurt both lost more than two percent, while London fell 1.3 percent. Now U.S. consumer price inflation is above 2 percent annually and the unemployment rate is the lowest in about 40 years.

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

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

Just two hours before, CNBC reported that an unnamed senior White House official told its correspondent that, "This is a bull market correction". Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.

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