Investors are betting on the short term when Powell wins
CNBC’s Jim Cramer on Wednesday advised investors to think about the bigger picture when it comes to the Federal Reserve’s battle against inflation and its effect on the stock market.
“Short-term camp is made up of people who either can’t stand any pain or don’t believe in it [Fed Chair Jerome] “Crazy Money” host said Powell and they want out.
“I think Powell wins the game and when he does, we will be on the field and the short-term players will be in the bottom of the stands,” he added.
The Federal Reserve raised interest rates by 75 basis points on Wednesday and indicated that it will continue its aggressive campaign against inflation.
Stocks ended the choppy trading session lower as Wall Street digested the news.
Cramer acknowledged that there will be pain in the future for the market, and advised investors to bet with the Federal Reserve if they want their portfolios to remain healthy over the long term.
He said that people who believe in Powell’s vision – whom Cramer calls the silent majority – understand that the central bank must raise interest rates to avoid pain even afterward.
“The silent majority wants to be able to buy a house at a reasonable price without getting into a bidding war over it,” he said. “The silent majority knows their stock will be worth less when they retire if Powell doesn’t act now.”