The sell-off that rocked global stock markets in recent days was linked to the latest interest rate hike by the US Federal Reserve, a move that was strongly criticized by President Donald Trump.

Analyst Brett McGonegal, co-CEO of Seven Stars Cloud Group, told Bloomberg TV he believed the President’s comments were right. The central bank chief had a duty to monitor economic activity in the US and around the world, but he said the Fed chief may have over-reacted because of turbulence in some sectors.

“The Fed is seeing a market that the rest of the world doesn’t understand … there’s a lot of chaos going on, a lot of uncertainty. Global markets are very fragile right now, and this hawkish tone that [Fed chairman] Powell’s taken just doesn’t make sense at this point… I think he’s trying to say ‘Guys, just calm down’,” McGonegal said.

“You’ve got these massive [trade] shifts going on, you’ve got the Treasuries acting in a way they’ve never acted before, you’ve got this dollar-based trade out of Europe that’s blowing up in all European banks’ faces, you’ve got creditor problems… a lot of stuff that’s going on that would suggest that there may be a time to just slow down and seek a higher vantage point and figure out what happens…

“[But after] 10 years and $4 trillion of quantitative easing [under the Obama administration] to get inflation and the second we see it, everybody’s worried about it running away and having to raise rates and raise rates – it just doesn’t happen like that.

“The fear has always been that the Fed gets ahead of itself and they just put water on the fire and the whole thing goes the other way.”

Meanwhile, America’s trade row with Beijing had forced China to alter its policies, he said. “In this situation that we are in, China has had to back down on deleveraging [to clear bad loans in its banks]. So the real economy dictates your ability to fix such problems …[but] once you see slow spots [in economic activity] you have to curtail that.”

He speculated that the Fed may end up moving to boost the economy despite hiking rates recently to tighten economic activity.

Brett McGonegal is a principal investor in Asia Times.