The Dollar’s fall after Fed says it’s not ready to raise interest rates
US stocks are having a rough time after Fed Governor Jerome Powell made his strongest comments yet against the US central bank’s move to raise rates.
The US stock market lost nearly 8 per cent on Thursday morning, with the Dow Jones Industrial Average plunging nearly 2 per cent and the S&P 500 losing nearly 1 per cent.
The Dow was down more than 1,100 points at 17,788.17.
The move to lower rates came after a report that the Fed is close to raising rates by the end of the year.
Mr Powell also reiterated that the central bank was not ready for the next round of rate increases.
The Fed is due to meet next week to decide whether to raise its key interest rate.
“We will make a decision in the coming weeks on when to raise the federal funds rate and if the central banks inflation target should be met,” he said.
“That decision will depend upon what happens with the economy, the global economic outlook, and on the health of the U.S. labor market and the labour market as a whole.”
“The Fed is a highly regarded institution that has helped stabilize the global economy,” he added.
The Federal Reserve is currently raising its benchmark rate by 0.25 per cent every month.
US stocks have fallen over the past two months, with shares of Dow Jones fell more than 12 per cent, while the S & P 500 lost almost 8 per, while shares of Exxon Mobil fell 2 per, on the back of falling oil prices.
US President Donald Trump has taken to Twitter to criticise the Fed’s move.
“I am disappointed that the Federal Reserve did not make the appropriate call on their record,” Mr Trump said in a tweet.
“The U.C.F. should have raised rates as soon as possible, and would have done so at the right time.”
US Treasury Secretary Steven Mnuchin said the Federal Open Market Committee (FOMC) had made the right decision in lowering interest rates.
“It is the right thing to do,” Mr Mnuchin told reporters in Washington.
“But I would note that the FOMC’s decisions are subject to change and are not guaranteed to be right every time.”
A spokesman for the Fed said the central banker was not planning to announce a rate increase.
“As we move towards a more normal economic environment, the Fed has not yet decided whether to increase its key rate, but will likely take a closer look at the labor market over the coming months,” the spokesman said.