Fed's Evans sees a pause after lifting rates to around 3 percent

US President Donald Trump said Wednesday's (Oct 10) stock market sell-off was in fact a long awaited "correction", and that the Federal Reserve, which has been raising US interest rates, has gone "crazy".

He adds, "I think the Fed has gone insane". "They are so tight. I just don't think it's necessary to go as fast".

Trump reportedly made the remarks after stepping off Air Force One in Erie, Pennsylvania, where he is due to hold a "Make America Great Again" rally.

White House Press Secretary Sarah Sanders said in a statement following the close of markets that the U.S. economy is "incredibly strong" despite the selloff, which analysts attributed in part to trade tensions with China.

Chicago Federal Reserve Bank President Charles Evans visits the online music retailer Sweetwater, in Fort Wayne, Indiana, U.S., September 14 2018.

Evans said he estimates neutral to be around 2.75 percent, so "something a little bit above that would be slightly restrictive" and would allow the unemployment rate to rise gradually to a more sustainable level.

After the central bank announced its third increase of the year in September - a quarter-point boost that raised the benchmark federal funds rate to a target range of 2 per cent to 2.25 per cent - Trump said he was "not happy" about it.