The Federal Reserve may be hard-pressed to rationalize yet another rate cut at its next meeting in September because the economy is "a little better than people realize," CNBC's Jim Cramer said Tuesday.
"There is no recession," Cramer said on "Squawk on the Street," citing better revenue than expected from quarterly retailers this week, including Home Depot on Tuesday morning.
"The hawks at the Fed will be gunning for no more price cuts, which is obviously not what the market wants," Cramer said, after an unstable last week on Wall Street gave way to a three-session rebound.
In early trading on Tuesday, Wall Street fell lower while bond yields resumed slides. But Dow managed to erase some of those losses, led by a 4% jump in shares in the Dow component Home Depot.
On Wednesday, the Dow Jones Industrial Average dropped 800 points, or 3%, with bond yields falling to multi-year lows and the 1
This inversion, while short, has historically signaled a recession.
Against a backdrop of lower market rates and concern for global economic growth due to the US-China trade war, the market pointed to 100% probability of a new Fed policy rate next month.
Last month, central bankers cut interest rates for the first time in more than a decade. The 0.25% move lowered interest rates to a target range of 2% to 2.25%.
On Monday, President Donald Trump kept the pressure on the Fed, twittering markets need a 1% interest rate, or 100 basis points, "over a fairly short period of time."
But the Fed tends to favor shallower moves. In fact, the market sees less than 3% chance of an interest rate cut in September greater than 0.25%.