Kudlow says Trump respects Fed despite bank blame for stock collapse

The chief economic adviser of the White House said Thursday that President TrumpDonald John TrumpTrump reiterates his claim without proof that paid demonstrators disrupted his rallies. Five points to remember from the last debate in the Tennessee Senate. Trump Confront Dems at the Pennsylvania Rally as Hurricane Michael Strikes Florida MORE He was not giving orders to the Federal Reserve when he said the bank had "gone crazy" with "ridiculous" interest rate hikes.

National Economic Council director Larry Kudlow told reporters that Trump's harsh criticism should not be seen as an attempt to influence the independent central bank. On Wednesday, the president accused the Fed of causing a massive fall in the stock market earlier in the day, insisting that the bank "go ahead".

"He has his point of view," said Kudlow Thursday of Trump. "But he does not tell them," Change your plan, do it differently. "None of that, he knows the Fed is independent and he respects that."

Trump has frequently criticized the Fed and its president, Jerome Powell, for a series of planned hikes aimed at bringing interest rates back to historically neutral levels. Unlike most Republicans and right-wing economists, Trump prefers the Fed to keep rates at a lower level to boost job growth.

With unemployment near record lows, the Fed is looking to raise interest rates fast enough to avoid overheating the economy and rapid inflation. Trump dismissed these concerns and said Wednesday that Fed rate hikes were not necessary.

The rise in interest rates is one of the factors that frighten investors, and US stocks suffered Wednesday their worst losses since February. The Dow Jones Industrial Average fell 3%, while the Nasdaq and the S & P 500 lost 4% and 3.3% each.

Trump accused the Fed of collapsing its market on Wednesday even though he said earlier in the day that the losses were an expected correction. Economists and analysts are gearing up for the market to return after several years of soaring share prices under Trump.

Kudlow said on Thursday that he agreed with Trump 's first explanation on falling stocks and that he would not take any emergency measures to stabilize the markets.

"As he said yesterday, it is a long overdue correction. He said that. By the way, I agree with that, "said Kudlow.