Cramer: How a rate hike could hurt economy

With the Federal Reserve scheduled to kick off its Federal Open Market Committee meeting Wednesday, CNBC's Jim Cramer said a rate liftoff could hurt the economy.

"The areas that are strong in the economy are very rate sensitive: autos and housing," he said Tuesday on "Squawk on the Street."

"That strength can be taken away by a belief that, unless the statement contains a 'one-and-done' [rate hike], then you're going to start to building in what I regard as bad numbers for manufacturers because the dollar should go much higher, and bad numbers for these areas because people are going to say, 'In 2016, we can't be at 17 million units for auto; we can't maintain these housing numbers' because it means that rates are going to keep going higher," Cramer added.

The Fed is expected to conclude its two-day meeting and make its monetary policy announcement Thursday.

If the central bank does raise rates, it would be the first time it did so in nearly a decade.

Stocks were up midmorning Tuesday.