The Federal Reserve's decision to increase interest rates are partially an endorsement of the strength of the U.S. economy. | Karen Bleier/AFP/Getty Images Finance Trump: Fed has ‘gone crazy’

President Donald Trump sharpened his criticism of the Federal Reserve on Wednesday after the stock market tanked, saying the central bank has “gone crazy,” in what could be a preview of heightened attacks if the economy slows.

Trump made the comment in response to a question about the more than 800-point plunge in the Dow Jones Industrial Average after the president arrived in Erie, Pa., for a campaign rally.


It’s the second time in two days he has criticized the central bank, though his words on Tuesday were more measured. While he took aim at the Fed’s monetary policy, he acknowledged then that they are “doing what they think is necessary.”

But Wednesday Trump asserted that the Fed — which has already hiked interest rates three times this year and is likely to do so again in December — has moved too fast. The central bank is working to raise rates to a more normal level after leaving them near zero for nearly a decade to boost the economy in the wake of the 2008 financial crisis.

The three major stock market indexes on Wednesday dropped more than 3 percent, with the Dow suffering its largest loss since February.

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Yet even with increased volatility this year, stocks have steadily climbed. It’s unclear whether investors are now reacting because they feel shares are overvalued, or whether the drop reflects a larger panic over rising interest rates and worries about a slowdown in China’s economy as the U.S. wages economic warfare against Beijing.

Fed officials last month predicted that gross domestic product growth would exceed 3 percent this year.

But the central bank faces a delicate balancing act in supporting sustained economic growth without accelerating inflation as the near-record expansion continues. New tax cuts and increased government spending are speeding short-term growth, but wage gains are still moving at only a modest rate.

White House press secretary Sarah Huckabee Sanders said the economy is still “incredibly strong.”

“Unemployment is at a 50-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,” she said in a statement.