- CNBC’s Jim Cramer addressed the inflation situation in the U.S. on Wednesday, saying the Fed won’t stop raising interest rates until the cost of living falls.
- “For two years we have been hearing that the Fed’s rapid rate hikes would soon trigger a recession, which would then depress inflation and ultimately lead to rate cuts,” Cramer said. “But that never happened.”
CNBC’s Jim Cramer addressed the inflation situation in the U.S. on Wednesday, saying the Federal Reserve won’t stop raising interest rates until the cost of living falls.
“For two years we have been hearing that the Fed’s rapid rate hikes would soon trigger a recession, which would then depress inflation and ultimately lead to rate cuts,” Cramer said. “But that never happened.”
At the end of its two-day policy meeting on Wednesday, the central bank left interest rates unchanged but signaled it would raise them again this year.
Cramer believes Fed Chairman Jerome Powell would welcome a drop in prices without layoffs but might raise interest rates again even if it puts more people out of work. According to Cramer, Powell is “willing to inflict this pain” because he knows the long-term damage of inflation is an even worse scenario.
Cramer believes the Fed has done a good job of bringing inflation down from extreme highs when things were truly out of control. Still, inflation remains high and at least moderately out of control, he added.
“Perhaps that means Powell is almost ready to shift the stock market from a sell to a standstill. Or maybe he’ll know it’s time to stop tightening when he sees it, not before,” Cramer said.
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