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Mad Money host Jim Cramer said the market has decided that the Fed “will tighten money anyway and cause a recession.” Cramer also recently said that we are in a bull market, advising investors to buy on dips.
Jim Cramer, host of CNBC’s Mad Money show, believes that the market has judged that the US economy will fall into recession. Cramer is a former hedge fund manager who co-founded Thestreet.com, a financial news and literacy website.
Cramer tweeted on Monday:
This market will soon turn negative. It has re-digested Friday’s news and decided that the Fed will tighten money anyway and cause a recession.
The Fed raised its benchmark interest rate by 25 basis points last week after raising rates by 75 basis points in a row. Stocks rose after the Fed announcement. Elsewhere, new data from the Bureau of Labor Statistics on Friday showed that 517,000 jobs were created in January and the unemployment rate fell to 3.4% from 3.5%, the lowest level since May 1969. However, Cramer noted that the S&P 500 was down slightly early Monday.
Many people don’t think the U.S. is going into recession. “When you have 500,000 jobs and the lowest unemployment rate in 50 years, you don’t have a recession,” Treasury Secretary Janet Yellen said Monday on ABC’s “Good Morning America.” Bank Goldman Sachs on Monday lowered its chances of a U.S. recession in the next 12 months to 25 percent from 35 percent. “Early signs of continued strength in the labor market and improving business surveys suggest that near-term recession risks have been significantly reduced,” Goldman Sachs wrote.
Many pointed out on Twitter that Cramer recently said we are in a bull market. The Mad Money host explained on Jan. 31 that the market’s ability to rise due to strong earnings reports suggests it has more room to run. By contrast, “bear markets go the other way — stocks open, then they get hammered, and you’re humiliated. Good earnings mean nothing except price target cuts,” argues Cramer, adding:
If we’re in a bull market, which I think we are, you’ve got to be ready … we’ve got to be ready now for a dip because in a bull market, there’s a buying opportunity.
He concluded: “Even if it doesn’t reverse today, well, there’s always tomorrow, so don’t think about shorting.”
Do you agree with Mad Money’s Jim Cramer? Let us know in the comments section below.
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