Investors will be “rewarded” when the Fed stops raising rates
CNBC’s Jim Cramer told investors on Tuesday that good things will come to those who wait for the Federal Reserve to stop raising interest rates.
“I always say that there is nothing to give without receiving. Right now, the advantage is that your entire portfolio is falling — the Fed is hurting,” he said. “The payoff is that you will eventually be rewarded with lower inflation and then lower rates. However, we are in the first phase, the phase of giving back.”
The S&P 500 and the Nasdaq Composite were down for the fifth day in a row, while the Dow Jones Industrial Average closed slightly higher.
Producer price report, consumer price index and retail sales report will be published on Wednesday, Thursday and Friday, respectively. Wall Street expects this data to shed light on whether the central bank will continue on its path of aggressively raising interest rates and whether the economy will enter recession.
“Apart from last week’s nonfarm payrolls report, the Fed is currently only interested in the consumer price index, due on Thursday. These numbers are a potential bomb,” Kramer said.
He reminded investors that temporary rallies should not be allowed to give them hope that the market decline will end unless the data shows that the economy is cooling down. “You have to remember that bears rule, not bulls,” he said.