Trump Blames Fed For Stock Market Plunge: 'China Is Not Our Problem'

Brushing aside all evidence to the contrary, President Donald Trump insists the U.S. Federal Reserve -- and not he -- is to blame for the bloodbath on Wall Street Wednesday that saw all three indices plunge to their lowest levels this year.

The Dow Jones Industrial Average tanked by 800 points, the S&P 500 was down 500 points while the NASDAQ Composite plummeted 242 points in a breathtaking rout that erased all the gains from a surprising recovery Monday.

Trump once again reserved his anger for Fed chairman Jerome Powell, who he appointed to the job, saying Powell is “clueless” about the reasons for the Wall Street plunge. Analysts concur the Wall Street rout was caused by Trump’s intractable trade war with China and the resulting volatility and uncertainty wracking markets worldwide. The rout was worsened by the inversion of the yield curve, whose apperance spooked investors into fleeing equities.

Trump also railed against the “crazy inverted yield curve,” which showed-up yesterday, and whose presence has preceded nine of the last 10 economic recessions to batter the United States. He also blamed Powell and the Fed for the yield curve.

In one tweet, Trump blamed Powell and the Fed for being a drag on the U.S. economy. In another, he blamed the Fed for the yield on the 2-year U.S. Treasury moving higher than the yield on the benchmark 10-year Treasury.

"We are winning, big time, against China," tweeted Trump. "Companies & jobs are fleeing. Prices to us have not gone up, and in some cases, have come down. China is not our problem, though Hong Kong is not helping. Our problem is with the Fed. Raised too much & too fast. Now too slow to cut...."

The yield on the benchmark 10-year Treasury note stood at 1.623% early Wednesday, well below the 2-year yield at 1.634%. The last inversion of this part of the yield curve came in December 2005, or two years before the Great Recession hit in 2008.

On average, a recession in the U.S. strikes 22 months following such an inversion. Twenty two months from now will take us to June 2021.

Yield on the U.S. 30-year bond on Wednesday fell to an all-time low at 2.02%, exceeding its former record low of 2.0889% in 2016 following Britain’s Brexit vote.

“CRAZY INVERTED YIELD CURVE!” tweeted Trump. “We should easily be reaping big Rewards & Gains, but the Fed is holding us back. We will Win!”

Falling Treasury yields reflect a move into safe-haven assets by investors rattled at the market volatility created by Trump’s trade war.

Trump has constantly berated the Fed to cut its benchmark federal funds rate, and when the Fed did on July 31, a displeased Trump said the Fed was “now too slow to cut” rates.