What the heck is going on when somehow a better economy means that investors should sell stocks? Jim Cramer is seriously confused as to why the market closed down on Monday on fears of growth and the idea that higher interest rates could be right around the corner.
On Friday, the market roared when it received excellent unemployment data, but then reversed when investors realized that it could mean that the Fed could raise rates sooner than initially anticipated.
"We've had many a Fed in the past that would have raised rates multiple times already based just on employment, and I think that would have crushed our growth and strangled the nascent economic rebirth post the great recession, However, this Fed, led by Janet Yellen, has actually been very smart," Cramer said.
The flaw in this argument is that the Fed isn't going to just raise rates dramatically at the closest whim of good employment numbers. It has said over and over again that it is data dependent.
It is not just taking into consideration employment; it also looks at inflation, industrial production, wages and other items such as the health of the global economy.