Cramer: Yellen should say 'we can't get derailed'

Cramer: Yellen should put a stake in the ground
Cramer: Yellen should put a stake in the ground   

In her second day of congressional testimony, Fed Chair Janet Yellen should do a better job of stressing the importance of market stability, CNBC's Jim Cramer said Thursday.

"This would be a great time for her to put a stake in the ground saying we're the engine. We're the locomotive. We can't get derailed," Cramer said on "Squawk on the Street."

Yellen should also emphasize that rate hikes will happen when necessary rather than on a strict timetable, Cramer added.

As Yellen testified before the House Financial Services Committee on Wednesday, Treasury yields fell. The spread between 10-year and two-year yields moved to the flattest it's been since December 2007 — at 99.40 basis points. The market has been moving in this direction, and it continued to do so as some in the bond market were disappointed that Yellen did not say more about slowing rate hikes or even reversing them.

Major stock indexes were sharply lower Thursday. The pan-European STOXX 600 fell 2.6 percent as banks in the region plunged, with Deutsche Bank dropping 4.7 percent and UBS falling 2.6 percent.

"It would be terrific for Yellen to be a little more statesmanlike and look at the world. Recognize that we have an election in this country right now that is not signifying stability," said Cramer. "I'm not telling her to say rates are on hold. She should say: 'Listen, this not the time. We're just focused on the world and trying to continue the engine.'"