Cramer: Reports of Fed Exit, No Reason to Fear Rally

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It seems the stock market is growing jittery due to a report that said the Federal Reserve has mapped out a strategy for winding down its bond buying program.

Speculation in the market suggests that when the Fed bond buying begins to taper off, the market will sell-off.

In fact, skepticism is so widespread some pros have already started to sell in anticipation of a down move. "I'm hearing that the Journal article spurred some selling on Monday," Cramer said.

Those skeptics argue the mere fact that there's an article about a Fed exit plan is a sign of the top. Jim Cramer, however, isn't so sure.

Ben Bernanke
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Ben Bernanke

He sees plenty of reasons for the rally to sustain, even if the Fed winds down QE.

Although rates may tick higher, Cramer doesn't think they will shoot higher because he believes a strong appetite for Treasurys will endure. "I'm fully confident that there's demand for bonds away from Bernanke," he said.

Also, an uptick in rates could drive buying.

For example, it should be very positive for banks because it should improve the yield curve. "I'm convinced the banks would be big winners," he said. "Slightly higher rates should help their profits immensely." In turn, the phenomenon should drive buying in the financial sector.

In addition, Cramer thinks housing stocks and related plays would also rally. "Slightly higher rates will force potential homebuyers into making a decision," Cramer said. That is, anyone on the fence who wants to lock in the most competitive mortgage rates of a generation should feel compelled to make their move. The resulting virtuous ripple should drive a wide range of stocks from home improvement retailers to appliance makers and much more.

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All told, Cramer thinks selling stocks due to reports that the Fed is thinking about how to end their bond buying program is a misguided idea. "I just urge you to think about what you are going to sell," he said. "Is it really going to get hurt?"

Call Cramer: 1-800-743-CNBC

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