The Citibank parent was the first of the major U.S. banks to report its fourth-quarter results. While Citi missed analysts' revenue estimates due to late-2018 trading weakness, it handily beat profit expectations.
"When I listened to Citigroup's terrific conference call this morning, the one that sent the stock soaring 4 percent, I sure got the sense that we have a lot less to fear than we think," Cramer said on "Mad Money."
The declines in the major averages, which were largely tied to concerns about 2019 earnings and an economic slowdown in China, "obscure the real story," he argued.
"Citi may be the perfect metaphor for this moment: we're so worried about the state of the global economy that we're missing some great opportunities," he said.
Cramer pointed to some of Citigroup CEO Michael Corbat's remarks on the conference call. Corbat said management "clearly" saw "a disconnect between what we see in our business and what the markets are saying," adding that they found no evidence of a significant slowdown.
"The biggest risk in the global economy is one of talking ourselves into the next recession as opposed to the underlying fundamentals taking us there," the CEO said.
That, in addition to Citi's better-than-expected results, told Cramer that investors were likely overreacting to the slowdown fears rippling through the market.
The 21-percent year-over-year decline in Citi's trading volume — the "only meaningful negative" in the bank's report — only gave the quarter "the appearance of weakness," he argued.
"The truth is that trading has nothing to do with the real economy, which was robust for Citigroup," Cramer said. "That's the fear of fear itself speaking."
Plus, Citi has "momentum" drivers of its own, the "Mad Money" host said. The company is engaged in a share buyback program, has a cash management business that is both "fast-growing" and "low-risk," and has a robust global presence, he noted.
And if Citi's action can filter through the rest of the financial sector, which makes up roughly 20 percent of the S&P 500, that will mean good things for the broader stock market, he continued.
"If Citigroup is right that the only real fear here is the fear that we'll talk ourselves into a recession, then this earnings season could turn out to be a whole lot more positive than most people seem to be expecting," Cramer said.