"My assumption for the policy rate is that we can achieve our objective of keeping inflation to the 2 percent symmetric objective and the unemployment rate slowly rising back towards its sustainable rate with that stance of funds rate - but if we need more, we'll do more", he said. The Fed aims to raise rates to about 3 percent.
O'Hare attributed the losses to worries about higher interest rates but also cited a "broad-scale deterioration in sentiment" as investors realized that the pullback on Wall Street failed to prompt bargain hunting to stabilize prices, as has been the norm in recent years.
The steep drop in Japan followed a decline on Wall Street of almost 830 points, the biggest fall since February, amid Trump's latest criticism of the Federal Reserve, the USA central bank.
'As stocks go up, tech goes up more than the stock market. "The Fed is doing what it thinks is necessary but I don't like what they're doing because we have inflation really checked, and we have a lot of good things happening", Trump said to reporters on the White House lawn before departing for an Iowa event. Many observers expected that would trigger a sell-off in the stock market as investors flooded their cash into Treasurys.
On Friday, federal data showed that the USA jobless rate fell to 3.7 percent in September, its lowest point since 1969.
Stocks have been under pressure since the yield on 10-year US Treasury bonds jumped above three percent last week, a sudden move that raised fears of an overheating economy, speeding inflation and more aggressive Federal Reserve interest rate increases. "The Fed has gone insane".More news: Gov. Scott Issues Emergency Order for Panhandle as Likely Hurricane Approaches
"It's shifting the tectonic plates", said Jack Ablin, chief investment officer at Cresset Wealth Advisors. "They're so tight. I think the Fed has gone insane", Trump said.
"The fact that there's somewhat of a correction given how much the market has gone up is not particularly surprising". "The Fed increasing rates to me was a sign that the economy was able to stand on its own two feet".
"I stood on the floor in the crash of '87, so this is nothing", Benedict said.
Elsewhere, insurance companies dropped as Hurricane Michael continued to gather strength and came ashore in Florida bringing winds of up to 155 miles an hour. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent. Unemployment fell last month to a 49-year low of 3.7 per cent. It was more than $40 five years ago.
Luxury retailers tumbled after LVMH, the parent of Louis Vuitton, said its sales growth in China slowed.