“My main fear is that we could have a mini version of 2008 if the Fed doesn’t change course,” the “Mad Money” host said Monday night. “If Fed chief Jerome Powell actually starts listening to the stock market and wakes up to the damage that [Trump’s] tariffs can do to the economy, then maybe he’ll shift gears, just like [then-Fed Chairman Alan Greenspan] did in ’98.”
Cramer has been critical of Powell in recent weeks, agreeing with Trump who has been arguing against further rate hikes. The Fed has already raised rates three times this year, and one more is expected in December. Earlier this month, Powell said rates are a long way from so-called neutral.
If Powell halts his rate hikes, then “we can bottom and even roar higher” in the stock market, Cramer said. “But as long as Powell stays committed to the December hike and three more next year … and the president stays committed to expanding his tariffs, then history says we’ve got more downside no matter what.”