- CNBC’s Jim Cramer on Wednesday spoke about the state of inflation in the US and said the Fed won’t stop raising interest rates until the cost of living comes down.
- “For two years, we have heard that the Fed’s rapid rate hikes would soon cause a recession, which would crush inflation and ultimately lead to lower interest rates,” Cramer said. “But that never happened.”
CNBC’s Jim Cramer on Wednesday spoke about the state of inflation in the United States and said that the Federal Reserve will not stop raising interest rates until the cost of living comes down.
“For two years, we have heard that the Fed’s rapid rate hikes would soon cause a recession, which would crush inflation and ultimately lead to lower interest rates,” Cramer said. “But that never happened.”
At the end of the two-day policy meeting on Wednesday, the central bank left interest rates unchanged but indicated it would raise them again this year.
Cramer believes Fed Chairman Jerome Powell would like to see rates fall without layoffs, but he may raise interest rates again even if that puts more people out of work. According to Cramer, Powell is “willing to inflict this pain” because he knows that the long-term damage from inflation is a worse scenario.
Cramer believes the Fed has done a good job of bringing inflation down from its highs when things were really out of control. He added that inflation remains high and out of control, at least moderately.
“Maybe this means Powell is almost ready to move the stock market from sell to hold. Or maybe he will know the right time to stop tightening when he sees it rather than before,” Cramer said.
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”