CNBC's Jim Cramer on Thursday praised the Federal Reserve and its chairman, Jerome Powell, for updating their approach to monetary policy to help the U.S. economy recover from the coronavirus pandemic.
"Powell is on the side of the bulls," Cramer said on "Squawk on the Street."
The Fed earlier Thursday said it would be willing to let inflation run hotter than usual in order to help the labor market and broader U.S. economy as they digs out of a deep hole caused by the Covid-19 crisis.
"[Powell] basically just said, 'Hey guys, just go. Go get the economy back. I am not going to get in the way of it,'" Cramer said, calling the approach "incredible" for investors because it allows corporate America to worry less about Fed intervention.
The Fed also made an adjustment to its employment approach, which Powell said was a significant one that "reflects our appreciation for the benefits of a strong labor market, particularly for many in low- and moderate-income communities."
"This change may appear subtle, but it reflects our view that a robust job market can be sustained without causing an outbreak of inflation," added Powell.
Cramer said Powell and the Fed have come down on the side of the "working person."
"He's not listening to people who say, 'You better start worrying about inflation now.' He's looking about employment and realizing, you know what, we've got to be sure that we don't go back into a depression after we've had some nice comeback," Cramer said.
The implications of the Fed's moves mean the central bank is less likely to raise interest rates as the unemployment rate falls, provided inflation does not rise concurrently. Typically, central bankers have preemptively moved to raise rates as unemployment rates drop under the belief that it could lead to dangerously high inflation.
Cramer, host of "Mad Money," said he believes that the root of Powell's approach is a desire to avoid causing further damage to a U.S. economy that has been ravaged by forced business closures and other measures designed to slow the spread of Covid-19.
"This is a terrible economy. It's nobody's fault." said Cramer, who has previously praised Powell's response to the coronavirus crisis. "He's not saying, 'Party on.' It's just, 'Look, I'm not going to hurt people.'"
— CNBC's Jeff Cox contributed to this report.