Jim Cramer predicts “monster rate hikes” ahead of a major Fed decision

Jim Cramer predicts “monster rate hikes” ahead of a major Fed decision

Web Desk
June 15, 2022

Jim Cramer predicts “monster rate hikes” ahead of a major Fed decision

Jim Cramer called on Federal Reserve Chair Jerome Powell to pursue aggressive interest rate hikes to combat inflation on Tuesday.
“He has to hit us with some monster rate hikes to cool things down … just to fix a problem not of his own making,” the “Mad Money” host said.

Jim Cramer called on Federal Reserve Chair Jerome Powell to implement aggressive interest rate hikes to combat inflation on Tuesday.

“Jay Powell can’t solve the war in Ukraine. He can’t get more oil out of the ground. … The same goes for the other big source of inflation, food,” the “Mad Money” host said.

“He has to hit us with some monster rate hikes to cool things down while selling, I hope, at least $200 billion in bonds a month — twice the current schedule — just to fix a problem, not of his own making,” he added.

His remarks came as the Federal Reserve began its June meeting to determine the extent of the next interest rate hike, which will be announced on Wednesday.

The Federal Reserve, which hiked interest rates by 25 basis points in March and 50 basis points in May, will also begin unloading some of its balance sheets on Wednesday in a bid to drain trillions of dollars of liquidity from the banking system.

Investors and central bank policymakers alike are bracing for a rate hike of 75 basis points on Wednesday. As a result, the S&P 500 fell further into bear territory on Tuesday, while the Nasdaq Composite and Dow Jones Industrial Average remained volatile.

In May, inflation reached new highs, with prices rising 8.6 percent from the previous year, the highest increase in over four decades, fueling the market’s recent falls.

In recent weeks, Cramer has campaigned for 100-basis-point rate hikes, asking Powell to take more action while arguing that the Fed chairman is not to blame for the current condition of inflation.

“In retrospect, the Fed provided way more liquidity than it needed to. It should’ve stopped buying bonds more than a year ago. … But beyond selling trillions in bonds to rein in the economy and raising rates to cool down what can be cooled — which isn’t much — we’ve got to stop blaming Powell for all things inflation,” Cramer said.