When it comes to the nascent U.S. economic slowdown, figuring out where to place the blame is more nuanced than it seems, CNBC's Jim Cramer argued Tuesday.
President Donald Trump's tariffs on Chinese goods and the Federal Reserve's interest rate policies have emerged as the leading causes, he said. But when he talks to his sources on Wall Street, one heavily outweighs the other in terms of importance.
"I'm constantly talking to CEOs who do business both here and abroad. I always ask them about the tariffs, because tariffs do matter," Cramer said. "But these executives are so much more concerned about the Fed's rate hikes, they always change the conversation, particularly the threat of three more tightenings next year. That's top of mind."
The "Mad Money" host explained that even though Trump's tariffs are putting pressure on parts of the economy, a number of business executives see them as necessary to push back against China's unfair trading practices. Interest rates, on the other hand, bring up more of a debate, he said: why hike rates when tariffs are already slowing business?
"I'm OK with one last rate hike tomorrow," Cramer said. "But believe me, if the businesspeople I deal with thought that the president's trade wars were at the heart of this slowdown that I started predicting ... in October, I'd be shouting it from the darned rooftops."
"But they're simply not saying that," he continued. "I only know what they tell me: it's almost all on the Fed. Yep, the Fed can make or break the economy here, and, of course, the stock market. That's why tomorrow's meeting is so darn important — the wrong decision could be disastrous for stocks, but the right decision will create, let's say, a more positive backdrop and perhaps even an oversold rally that lasts into 2019."