CNBC’s Jim Cramer on Tuesday warned investors against assuming the Federal Reserve would make a soft landing for the economy.
“The fine weather bulls who all believed we were on the verge of a severe recession two months ago … are now rushing to declare a way of soft landing too soon,”Crazy money“The presenter said.” Look, I believe in a gentle landing, but the Fed still has a lot of work to do. “
Stocks recovered slowly in the second half of the year after soaring inflation, the Fed’s interest rate hikes and Russia’s invasion of the Ukrainian market in the first six months of the year.
Cramer has oil prices are credited with helping push the market to bottom in June. More recently, lower-than-expected consumer and producer price indexes for July signaled that inflation could peak, helping boost equities further.
The turn in the market has led some investors to believe that the Fed will be able to rein in inflation without triggering a recession or at most creating a mild one.
However, Cramer cautions that bearish investors who have previously chosen to flee the market at the worst of times should be careful about betting on a soft landing when stocks are rallying – especially considering that employment rate is still high.
He added that the market tends to lose money when investors start chasing rallies, underscoring the need for caution.
“The bandwagon company is often in a little bit of danger when you jump in a month late, when so many small and medium sized companies have been successful,” he said.