CNBC's Jim Cramer on Thursday said it's a "lunatic theory" to think that Federal Reserve Chair Jerome Powell let the market down by not going along with President Donald Trump's call to cut interest rates.
"That is insane. Look, I am a big believer that the president has every right to complain about Powell's moves," the "Mad Money" host said. "I think that many of his criticisms actually [have been] spot on. But we have an independent central bank in the country, which means Powell can do whatever the heck he wants."
Disappointed, many began selling futures off the news, Cramer said. Even if Powell followed Trump's orders and moved to ease on monetary policy, now is not the time to reduce the benchmark rate, he said.
It currently stands between 2.25% and 2.5%, the level the Fed raised rates to in December.
"If people started believing Powell could be pressured into doing what the White House wants, he would lose all credibility," Cramer said. "No one would believe him when he threatened to tighten, because you know he'd back down. That's why I think Trump's tweets are counterproductive."
The federal Labor Department will release its nonfarm payroll report on Friday. Cramer expects the numbers to be strong, but is concerned it will only silence those calling for rate cuts and embolden those that want a rate hike. People that will call for a more hawkish Fed still won't concede that they got it wrong when Powell last hiked rates in the fourth quarter and said there were more planned for 2019.
"Powell can't start cutting rates here – no, he can't. Not with with better numbers than we had when he last tightened in December, which is the case," the "Mad Money" host said. "He has to wait a bit after the last hike — no matter what. Regardless of what Trump said, a cut was never on the table."
The central bank on Wednesday revealed that it would leave interest rates at current levels amid low inflation. Trump has argued that the lack of inflation is a good reason to cut rates in order to spur more economic growth.
"We don't live in a banana republic where the central bank is run by some spineless sycophant, and that's a good thing," Cramer said.
WATCH: Cramer explains why Fed Chair Powell won't bow to President Trump on interest rates demands