WASHINGTON: President Donald Trump renewed his attacks on the US central bank on Thursday, saying it was “too aggressive” in raising interest rates.

“I think they’re making a big mistake,” Trump said during a broadcast of Fox & Friends.

While he acknowledged that higher rates helped savers, he criticised the Federal Reserve’s tactics.

“They’re being too aggressive.” The comments followed his unprecedented criticism late Thursday, when he said the Fed had “gone crazy,” and blamed the interest rate increases for the stock selloff, which caused the Dow Jones Industrial Average to lose more than 800 points, in its worst tumble since February.

The rout caused a domino effect worldwide, with losses spreading to Asia and Europe as investors remained concerned about rising rates - which would send more buyers out of equities and into bonds - as well as the impact of Trump’s trade conflict with China on corporate profits.

Trump has repeatedly touted the spate of Wall Street records as proof of the success of his economic program, including his confrontational trade strategy, and criticised the Fed for raising the benchmark interest rate - three times this year - saying it would undermines his efforts.

In fact it is largely his policies that are behind the changes: tax cuts and increased government spending are expected to juice the economy, adding to the Fed’s justification to raise interest rates.

Meanwhile, trade conflicts raise costs for companies, which could hit the bottom line in quarterly earnings - something analysts said helped prompt Wednesday’s sell-off.

‘Do the right thing’: While Trump said rising rates after years near zero are “good for people with money in the bank and now they can get interest on their money for first time in a long time,” he insisted Thursday Fed was “making a mistake.” The attacks on the Fed are another example of Trump breaking with recent norms. The Fed is an independent body and presidents in recent decades have avoided commenting publicly on its actions.

Published in Dawn, October 12th, 2018