CNBC’s Jim Cramer said Tuesday’s market gains must go down for the Federal Reserve to beat inflation as soon as possible.
“Right now, the best result will be that averages are falling fast, so [Fed Chair Jay Powell] can get it over with, he said.
“Powell had better hopes that this race will not last, otherwise the beach house prices, new construction jobs, Lennar homes, processed food stocks and oil prices will not go down and stay down anytime soon,”[ads1]; he added, referring to the homebuilder’s warning in its latest income statement that buyers have pushed back against current house prices with declining sales in some markets.
Shares rose on Tuesday after the market closed on Monday due to the June holidays. While the rally was a welcome deadline for investors after last week’s declines, many fear that the comeback will be short-lived as recession fears loom over Wall Street.
Cramer said that although he normally favors higher stock prices, the Fed needs the market to fall for inflation to fall as well. The reason, he said, is that a downturn will dampen spending and keep people in the job market.
“In recent years, major upswings in the stock market have made it possible for winners to use like crazy,” he said.
“If Powell can make this market go down and stay down, and undo a lot of these gains, then the rich are less likely to use aggressively, and many people are more likely to stay in the workforce when they otherwise would. have retired, “he added.