Market pain, says Jim Cramer, is necessary to prevent endless price hikes

CNBC’s Jim Cramer reminded investors Thursday that pain in the stock market is unfortunately necessary for the Federal Reserve to win against inflation.

“No one wants to seek layoffs or lower share prices. But the alternative is ever-high inflation β€” endless price increases for everything β€” and no one wants that, either,” he said.

Stocks fell on Thursday after new data indicated the labor market remained strong, despite sharp interest rate increases by the Federal Reserve to curb price rises.

Cramer explained that while the Fed needs to make it so that businesses cannot raise prices for goods and services, such an outcome is bound to hurt the portfolio.

“Low home prices – it’s good if you’re looking for a house, but it’s terrible if you own shares in a homebuilder.” Linarβ€œIn other words, there is no free lunch for you, investor,” he said as an example.

Although it is unclear when the central bank will be able to roll back interest rate increases and stop hurting the market, it said Friday’s release of the non-farm payrolls report will shed more light on the state of inflation.

“If you don’t show higher unemployment with no wage growth, the Fed will need to continue aggressively raising interest rates,” Kramer said.

Jim Cramer reminds investors that market pain is necessary to prevent endless price hikes

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