IMF chief defends rate hikes after Trump slams 'crazy' Fed

IMF chief Christine Lagarde defended central bank rate hikes in a veiled rebuke to Donald Trump after the US president blamed "crazy" Fed policies for contributing to financial market turmoil.

Christine's comments came as a global market sell-off rolled on following Trump's comments, underscoring rising financial volatility that the IMF will address at its annual meetings in Bali.

Christine said central bank rate increases such as those by the policy-setting US Federal Reserve were justified by fundamentals.

"It is clearly a necessary development for those economies that are showing much improved growth, inflation that is picking up... unemployment that is extremely low," she told a press briefing in Bali.

"It's inevitable that central banks make the decisions that they make." Following a sharp Wall Street sell-off on Wednesday, Trump said the Federal Reserve "is making a mistake."

"I think the Fed has gone crazy," he said.