“ ‘I think the Fed is making a mistake. It’s so tight, I think the Fed has gone crazy’ ”

That’s the view President Donald Trump shared of the Federal Reserve on Wednesday in the wake of a virtual bloodbath on Wall Street that resulted in the worst daily decline for the Dow Jones Industrial Average DJIA, +0.19% and the S&P 500 index SPX, +0.29% since both U.S. equity benchmarks tumbled into correction territory back in early February. The Nasdaq Composite Index COMP, +0.36% , meanwhile, suffered its ugliest day since U.K. voters exhibited a narrow preference for a market-disrupting plan to exit the European Union’s trade bloc back in June 2016.

In all, it was a withering session for an administration that has closely watched stock-market performance and views it, at least partly, as a gauge of the success of its economic policies, including corporate tax cuts and deregulation.

However, those efforts, in Trump’s stated view, are imperiled by the policies of the Fed, which has raised interest rates three times this year and has signaled its intention to do so a fourth time before year-end.

International Monetary Fund managing director Christine Lagarde dismissed Trump’s comments Thursday. “I would not associate [the Fed chairman] Jay Powell with craziness,” she told CNBC at the IMF and World Bank annual meetings in Bali, Indonesia.

Trump’s comments, made before a rally in Erie, Pa., on Wednesday, are an escalation of previous criticisms that he has leveled against the Fed and Powell, whom Trump appointed to the chairman role over incumbent Janet Yellen. Reuters reported in late August that Trump was “not thrilled” with Powell, whom he said he’d thought would provide “more help.”

Trump also complained to donors at a Hamptons fundraiser that Powell hasn’t been a “cheap money” chairman of the central bank, Bloomberg News reported earlier in August.

Investors appear to be responding to a steady rise in borrowing costs, reflected in the 10-year Treasury note yield TMUBMUSD10Y, 0.669% climbing Wednesday to a high around 3.25%, marking a seven-year peak for a debt instrument used to price everything from mortgages to car loans.

It is unusual, but not entirely unprecedented, for a U.S. president to publicly articulate the type of criticism against Fed bosses that Trump has against Powell because it can be viewed as threatening a monetary body that prides itself on its independence to make monetary-policy decisions.

In a lengthy statement following the market’s downturn on Wednesday, White House spokeswoman Sarah Sanders said this:

The fundamentals and future of the U.S. economy remain incredibly strong. Unemployment is at a fifty year low, taxes for families and businesses have been cut, regulations and red tape have been slashed, paychecks are getting fatter, consumer and small business confidence are setting records, and farmers, ranchers and manufacturers are empowered by better trade deals. President Trump’s economic policies are the reasons for these historic successes and they have created a solid base for continued growth.

Some were quick to defend the Fed’s efforts to normalize policy in the wake of the 2007-09 financial crisis:

Trump later doubled down on his “crazy” remarks, during a late Wednesday interview on Fox News: “The problem I have is with the Fed. The Fed is going wild. I mean, I don’t know what their problem is that they are raising interest rates, and it’s ridiculous.

“The problem, in my opinion, is Treasury and the Fed. The Fed is going loco, and there’s no reason for them to do it. I’m not happy about it.”

Read on:Chicago Fed’s Evans on Trump doubts about interest-rate increases: ‘fair’ question