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Feeding on the edge of a “soft, safe landing” in inflation battle




  • Federal Reserve Chairman Jerome Powell may be forced to ease rate hikes after the latest bank hikes, tech layoffs and inflation readings, CNBC’s Jim Cramer said.
  • “Until last week’s bank fiasco, I think [Federal Reserve Chair] Jay Powell lost the war on inflation,” Cramer said.

The collapse of several banks, the potential folding of startups and general turmoil in the economy suggest the Federal Reserve is on the “edge of a soft, safe landing,”[ads1]; CNBC’s Jim Cramer said Tuesday.

“Until last week’s bank fiasco, I think [Federal Reserve Chair] Jay Powell lost the war on inflation,” Cramer said. But the bank run that led to the failure of Silicon Valley Bank and the accompanying technical problems are signs that Powell is winning the battle, if not the war, he added.

Cramer acknowledged that prices remain high for travel, housing and groceries, but given the broader turmoil, “we don’t want the Fed to turn a potential soft landing into a hard one.”

Regional banks have largely recovered from concerns over SVB’s deposit run, which Cramer said he had never seen in his lifetime. But that’s largely a moot point, given that confidence in the banking system has been hammered and the consumer is exhausted.

Tech layoffs, the collapse of commercial real estate and rising credit card use all indicate that even with “pockets of confidence,” the Fed is nearing victory, he said.

“I now think it would be reckless if Powell goes much above 5%,” Cramer said.

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