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Cramer: Fed chief Jerome Powell is Trump's worst re-election nightmare

Key Points
  • "If I were running Trump's re-election campaign, Jay Powell would be my worst nightmare," CNBC's Jim Cramer says.
  • Cramer argues the president is right to worry about a possible recession in 2019 as a result of the Powell's rate hikes.
VIDEO10:4510:45
Cramer: Dow could have 'easily' been down 1,000 points on Fed hike

CNBC's Jim Cramer went off on Federal Reserve Chairman Jerome Powell, saying President Donald Trump is right to worry about a possible recession in 2019 as a result of the central bank chief's rate hikes.

"The president is spot on," Cramer said on CNBC's "Mad Money" on Wednesday evening, after the Powell Fed raised rates for the fourth time in 2018 and projected two more increases next year. "The Fed is perfectly happy to gradually strangle the economy, the U.S. economy, in order to stamp out inflation, or the potential of inflation. And that's bad news for corporate earnings" and the stock market.

Cramer has been saying for months there's no need to worry about inflation since it's not problematically high, and that the economy is showing pockets of weakness. Taken together, those factors indicate the Fed should pause rate hike, he has argued.

"If I were running Trump's re-election campaign, Jay Powell would be my worst nightmare," said Cramer, who, like the president, has been calling on Powell to stop. Powell apologists, "they must have no sense or empathy for what's about to happen to the working person in this country," Cramer added.

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The Fed just raised interest rates — Here are three big takeaways

Cramer said Powell asserted the Fed's independence from political pressure but to the detriment of the economy and the stock market. "You could easily argue that we should've been down 1,000 Dow points," Cramer said, adding that it would have made "a ton of sense" given what he's heard.

Erasing a 380-point gain prior to the Fed decision, the Dow Jones Industrial Average sank 351 points, closing at a 13-month low. The S&P 500 finished at a 15-month low, with 60 percent of the index now in a bear market, marked by declines of 20 percent or more from recent highs. The Dow opened nearly 100 points lower on Thursday.

"I can't blame anyone for selling," Cramer said.

"There's a real cosmic irony in the fact that if President Trump had simply kept Janet Yellen in place as Fed chief, she'd be taking a much less aggressive approach here," Cramer said. Yellen, nominated as Fed chief by former President Barack Obama, "would have been a lot more prudent and a lot less reckless," Cramer said.

Trump nominated Powell in November 2017 to lead the Fed. Powell, a member of the Fed's board of governors since 2012, succeeded Yellen as central bank chair in February.

Cramer said Wednesday he's not rooting against Powell. "I would like if this economy is doing much better than I believe."

"He's saying his homework is better than mine," Cramer said. "Sadly, I think that Powell is the one who's wrong."

The Fed declined to comment on Cramer's remarks. The White House was not immediately available to comment.