Federal Reserve Chairman Jerome Powell made a big mistake on interest rates last month but he finally corrected it Wednesday, CNBC's Jim Cramer said.
"I think he was being a little rash when he started. Yes, I used the word 'rookie mistake,'" Cramer said Thursday on "Squawk Box." Now the Fed chairman is doing "the sensible thing," Cramer added.
Powell has proven himself to be the "statesman that I knew him as before he was Fed chief," said Cramer, who had been highly critical of Powell ever since the central bank chief said on Oct. 3 that rates were a long way from so-called neutral. Those comments sent the market into a tailspin, with the in October logging its worst month since September 2011.
Speaking on Wednesday at The Economic Club of New York, Powell appeared to have walked back those earlier remarks, saying rates are "just below" neutral, perhaps indicting that concerns about a more aggressive path higher for rates may no longer be warranted. That sparked a strong rally on Wall Street, with the S&P 500 on Wednesday having its best session in eight months. The market was pulling back a bit early Thursday.
Shortly after the release of the prepared text of Powell's Economic Club speech, Cramer went on a tweet storm Wednesday, contending that Powell had "blinked" on rates. The Fed has already raised rates three times this year and another hike is expected in December.
The "Mad Money" host had warned last week that investors should sell their stocks if they think the Fed will raise rates in December. However, on Thursday, Cramer said the Fed's risk to the market has been neutralized for now.
Looking ahead, Cramer said investors should shift their attention to Saturday's meeting between President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Argentina, and whether the two leaders can lay the groundwork for easing their trade tensions.