US stock markets had their worst drop of the year Wednesday, with the Dow Jones Industrial Average dropping 800 points, or 3 percent.
Wednesday’s drop was the Dow’s 4th worst-ever day, though it did not crack the top 20 list in terms of percentage drops, reports The Hill.
The latest plunge came after the yield for 10-year Treasury bonds fell below that for 2-year bonds, an economic indicator that frequently predicts recession.
Economic forecasters have in recent days raised the odds of a recession in the coming year, fueled in part by concerns over the US trade war with China.
Fears about a weakening economy more than erased gains on Tuesday, when President Donald Trump announced that he would delay and exempt some items from 10 percent tariffs on Chinese imports set to go into effect on September 1.
Trump blamed the Federal Reserve for the state of the economy, saying it raised rates too quickly and had not cut them quickly enough, even as foreign central banks have lowered their rates more aggressively.
“China is not our problem,” Trump tweeted Wednesday afternoon before the market closed.
“Our problem is with the Fed,” he continued, before calling Federal Reserve Chairman Jerome Powell “clueless” and lamenting the “crazy inverted yield curve.”