Any Fed-related market decline Wednesday is a buying opportunity, Jim Cramer says
CNBC’s Jim Cramer said investors should be prepared to seize any market declines Wednesday when Wall Street’s attention will be on the Federal Reserve as it concludes a two-day policy meeting.
The central bank’s chairman, Jerome Powell, is scheduled to hold a press conference at roughly 2:30 p.m. Wednesday. Investors will be looking for insights into possible adjustments to the Fed’s highly accommodative monetary policy after months of hot inflation data. Cramer suggested wealthy investors who want to see a more hawkish Fed may react negatively if Powell retains his dovish stance on inflation.
“If this market goes down tomorrow thanks to the wrath of the rich, who blame Jay Powell for nicking their [municipal bonds] and their mansions, then you need to view that as a buying opportunity and jump on the best themes,” the “Mad Money” host said Tuesday. Cramer highlighted semiconductor companies, in particular, given the ongoing shortage in the industry.
“There simply aren’t enough chips to be had, and there’s nothing the Fed can do to change that other than destroying the economy, which is a less-than-ideal solution for a Fed chief facing reappointment, or not, by the president of the United States,” Cramer said.
Cramer’s comments Tuesday came after all three major U.S. equity indexes closed at a record for the third consecutive session. Strong corporate earnings boosted sentiment on Wall Street as markets enter a seasonally strong time of the year, a fact Cramer highlighted on Monday’s show.
On Wednesday the Fed is widely expected to announce a plan to start unwinding its monthly bond-buying program. That initiative, known as quantitative easing, started last year during the coronavirus pandemic in an effort to support the sputtering economy.
The central bank is not expected to adjust interest rates from their near-zero levels, Cramer noted, even though some high-profile market participants who are worried about inflation have recently called on the Fed to do so.
“My view? The whole debate is beside the point. What Powell knows is that we’ve got shortages everywhere and they can’t be fixed by sending the economy into a tailspin. You can’t get more wheat or corn or semiconductors or oil and gas, for that matter, by raising interest rates,” Cramer said.