- CNBC’s Jim Cramer said Federal Reserve Chairman Jerome Powell may have to moderate interest rate hikes after recent bank runs, tech layoffs and inflation readings.
- Until the bank fiasco last week, I think [Federal Reserve Chair] “Jay Powell was losing the war against inflation,” Cramer said.
CNBC’s Jim Cramer said Tuesday that the collapse of several banks, the potential shutdown of start-ups, and general jitters in the economy indicate the Fed is on the cusp of a soft and safe landing.
Until the bank fiasco last week, I think [Federal Reserve Chair] “Jay Powell was losing the war against inflation,” Cramer said. But the bank management that led to the failure of the 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 landing.”
Regional banks have largely rebounded from concerns about SVB’s deposit management, which Kramer said were unprecedented in his life. But it’s a highly moot point, given that confidence in the banking system has been damaged and consumer exhausted.
He said tech layoffs, a collapse in commercial real estate, and increased credit card use all suggest that even with “pockets of confidence,” the Fed is close to victory.
“I now think it would be reckless if Powell exceeded 5% so much,” Cramer said.
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