Jim Cramer calls for ‘monster rate hike’ ahead of key Fed decision

CNBC’s Jim Cramer on Tuesday called on Federal Reserve Chairman Jerome Powell to make aggressive interest rate hikes to lower inflation.

“Jay Powell can’t solve the war in Ukraine. He can’t get more oil from the ground. … The same goes for another major source of inflation, which is food,” he said. the “Crazy money‘ said the presenter.

“He’s got to hit us with some terrible rate hikes to cool things down while selling, I hope, at least $200 billion in bonds a month – double the current schedule – just to fix a problem he didn’t create for himself,” he added.

His comments come as the Fed begins its June meeting to decide on the size of its next rate hike, to be announced on Wednesday.

The Fed, which raised interest rates by 25 basis points in March and 50 basis points in May, will also begin offloading some of its balance sheets on Wednesday in an attempt to drain trillions of dollars of liquidity. out of the financial system.

Central bank investors and policymakers are prepare for a 75 basis point rate hike on Wednesday. The The market reacts accordingly as the S&P 500 continued to slide into bearish territory on Tuesday while the Nasdaq Composite and Dow Jones Industrial Average were also volatile.

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Inflation hits new high in May when price increased by 8.6% compared to last year in its fastest rise in more than four decades, also driving the market’s recent decline.

Cramer has advocated a 100 basis point rate hike in recent weeks, urge Powell to act stronger even as he argues that the head of the Fed is not to blame for the current state of inflation.

“In retrospect, the Fed provided more liquidity than it needed. They should have stopped buying bonds more than a year ago. … But beyond selling trillions of bonds to rein in the economy and boost interest rates,” he said. rate to cool down what can cool down – that’s not much – we have to stop blaming Powell for inflationing everything,” Cramer said.

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