CNBC’s Jim Cramer said Tuesday’s market gains should come down for the Federal Reserve to beat inflation as soon as possible.
“Right now, the best result would be for the stockings to go down quickly, so [Fed Chair Jay Powell] you can finish it, “he said.
“Powell should expect this race not to last, or else beach house prices, new construction work, Lennar houses, processed food stocks and oil prices will not go down and will continue to fall, “he added, referring to the housing builder’s warning in his latest earnings call that buyers have pushed back current house prices with sales slowing in some markets.
Stocks rose on Tuesday after the market closed on Monday due to the June holiday. While the rally was a welcome isolation for investors after last week’s falls, many fear the comeback will be short-lived as fears of recession approach Wall Street.
Cramer said that while it is usually in favor of higher stock prices, the Fed needs the market to go down for inflation to go down as well. The reason, he said, is that a declining market will slow spending and keep people in the job market.
“In recent years, the abundant profits in the stock market have allowed winners to spend like crazy,” he said.
“If Powell can get this market down and down, repealing much of that profit, the rich are less likely to spend aggressively and a lot of people stay in the workforce when, on the other hand, that way, they would have retired. ” added.