President Trump Takes Aim at Fed Again for Volatile Markets

Using the Federal Reserve as a punching bag when the capital markets misbehave has almost been a norm for U.S. President Donald Trump, and it was more of the same in his latest tweet. The president quoted Wells Fargo equity strategist Scott Wren, saying that if the Federal Reserve was more dovish with respect to monetary policy, the S&P 500 wouldn’t be experiencing the bouts of volatility it has been as of late along with the rest of the major indexes.

The S&P 500 did, however, pull itself out of correction territory in Tuesday morning’s trading session after another bout of sell-offs last week. Through last Friday’s trading session, the Dow was down 6.7%, while the S&P 500 and Nasdaq were down 8.8% and 10.9, respectively–evidence that October has been a roller coaster ride down from its previous highs set amidst the decade-long bull market.

The president did offer his market prognostications, saying that the latest volatility has been the result of upcoming midterm elections slated to take place November 6. In his estimation, investors are taking a breather from stocks and if they want U.S. equities to continue to ascend, he made it clear which way to vote.

Trump Deriding Fed Chairman

Since taking office, President Trump has been flicking jabs at Federal Reserve Chairman Jerome Powell for raising interest rates–the same man he nominated for the position. At the height of the markets’ historical bull market run, Trump would’ve liked growth to continue singing the same tenor at least through the year 2020 for his re-election bid, and he didn’t want interest rates getting in the way.

Trump has been leading the chorus on economic growth, taking the opportunity, when presented, to remind everyone that the strong data being extrapolated from the economy is coming under the helm of his presidency. As far as debates go as to who deserves more credit–the former administration under Barack Obama or the current one under Trump–the president made it clear who deserves the majority, if not all, the credit.

Related: Will the Federal Reserve Raise Interest Rates in December?

Trump ‘Not Happy’ with Rate Hikes

Since January 2017 when President Trump took office, the Federal Reserve has now hiked interest rates six times versus just once during former president Barack Obama’s tenure. With major stock market indexes like the S&P 500 reaching historic highs with companies like Apple and Amazon crossing the $1 trillion valuation mark, the prevailing sentiment is that another rate hike is to come before the end of 2018 and possibly three or more forecasted for 2019.

Following the latest rate hike announcement in September that the Fed would be raising the federal funds rate by 25 basis points to 2.25, Trump took the opportunity at a New York press conference to express his discontent.