Fed Holds Rates Steady—What Now?

Cramer during Tuesday’s Stop Trading! reacted to the latest announcement from the Federal Reserve, which today held interest rates steady at close to zero percent. He said Chairman Ben Bernanke’s statement was “positive for employment” and mortgage rates.

“This guy is not going to raise [interest rates] until people start getting hired,” Cramer said. “Too many people are unemployed.”

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The Mad Money host said Bernanke was “a historian” who knew all too well the mistakes previous Feds had made between 1928-29 and 1936-38, and he wasn’t about to repeat them.

Also, Cramer said Bernanke chose the word “depressed” to describe housing starts for a good reason. There had been some concern that the Fed would sell its mortgage-backed securities holdings too quickly and thereby push up mortgage rates. But the serious language used to describe the housing sector, Cramer said, proved that “is not going to happen.”

So what do investors do now? Cramer thinks the answer depends on your view of health-care reform and whether or not it will pass. If you think bill will stall out and gridlock will rule in Washington, then there’s no reason not to buy stocks.

But there will be “plenty of opportunities” for those who want to wait and see, Cramer said, “which I think there is no harm in doing.”

In the meantime, he has noticed moves in the rails, retail, chemicals and technology, specifically pointing out the “significant breakout” in Intel. Cramer said there’s a good chance we’ll see a number of upside surprise earnings reports this quarter from the tech sector and reminded viewers that Apple’s iPad will be released in a couple of weeks. He also recommended Ford , especially its preferred shares, and stocks with high dividend yields.

The listing of credit default swaps on exchanges will most likely be one provision that survives negotiations in the House and Senate over a financial-reform bill, Cramer said. He thinks that could be a “great business” for NYSE Euronext .

JPMorgan Chase is “the cheapest and the best” bank, Cramer said. And investors who don’t think “card check,” or legislation that would make it easier for workers to unionize, will pass should buy Walmart above $55.

But “I don’t think card check is dead,” Cramer said. “I want to see whether health care [reform] fails first.”

Lastly, Cramer warned coal-loving analysts against an Environmental Protection Agency that “will do whatever they want to stop” the commodity’s use in the US. Cramer said the EPA’s anti-coal stance was a big reason that CONSOL Energy bought Dominion Resource’s natural-gas assets in the Marcellus Shale.

“They wanted to take the risk” – coal exposure – “out of their business,” Cramer said.

Cramer's charitable trust owns Apple, Intel and JPMorgan Chase.

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