Federal Reserve Chairman Jerome Powell made the right choice in leaving interest rates unchanged and preaching patience — and it shouldn't be seen as him "caving" to Wall Street, says CNBC's Jim Cramer.
"Don't listen to the Fed watchers who claim that Powell caved to the stock market or the president," Cramer said Wednesday after the Fed's decision-making body concluded its two-day meeting. "The only thing Powell caved to is reality."
"Some would argue that Powell made a mistake, that he's simply capitulating to people like me who want higher stock prices. I hate this talk," the "Mad Money" host continued. "Sure, I love higher stock prices, ... but that's not the point and it has never been the point. [...] This is about the economy — who doesn't want a healthy economy? If Powell had stuck to his plan for a series of lockstep rate hikes, it would've been a lot more devastation to Main Street than to Wall Street."
Cramer maintained his monthslong theory that the Fed's earlier stance — which included a plan to raise interest rates three times in 2019 — would have brought an end to the United States' economic expansion.
So, at the end of the day, "while it's terrific that stocks rallied" after the Fed chief's statements, "that's not why Powell chose patience," the longtime stock-picker said. "He didn't want to be the guy who ended the expansion. He didn't want to be the reason we went into a recession."
"Think of it as a victory of prudence over recklessness," Cramer said.
Click here for his full take on the Fed's decision.