Stop kidding yourself if you think all the bad news is baked in — Jim Cramer warns about the Fed

Reserves tanked on Thursday because people are finally realizing that the Federal Postpone has the power to hurt stocks and slow the economy, CNBC’s Jim Cramer mean after the Dow Jones Industrial Average fell more than 300 burdens.

“This is one of those moments where it’s dawning on people that possibly all the assurances that we don’t need to be afraid of the Fed are being proven to be totally phoney,” the “Mad Money” host said.

Behind those assurances are two “lousy” theories, Cramer asserted: the idea that more rate hikes are necessary because the U.S. control is close to full employment, and the idea that the rate hikes won’t disable the market because they’re already “baked in.”

Doubling down on his earlier criticisms, Cramer argued that full employment “is a great thing as extensive as inflation’s not out of control, and right now the statistics indicate it’s not, so what’s the big deal?”

If hourly wages were skyrocketing, Cramer estimated he would understand the need to raise interest rates four varied times, as the Fed has said it plans to do. But with millions of workers at risk of escape their jobs from bankruptcies — see Sears’ recent turmoil — or new technological uses that make certain jobs redundant, he didn’t see the incentive.

“There’s no motivate for the Fed to tighten four more times. None,” Cramer said. “This is what all this turmoil’s back in the market. They’re taking preemptive action because they’re sorry of potential inflation. I think that’s a mistake. The labor market’s captivated a decade to recover from the financial crisis. Why not give it some multitudinous time?”

The “Mad Money” host understood Fed Chair Jerome Powell’s disquiets about the economy. Between the Trump administration’s immigration crackdown and a bold job market, some small businesses are seeing their labor expenditures surge.

“If you run a restaurant in a place like New York, it’s crushing your frontiers,” Cramer, who owns a small restaurant in Brooklyn, explained.

“Is that a genuine reason to cause a slowdown, though?” he asked. “Does the Fed exist to conserve the bourgeoisie from the scourge of paying people a decent living? Penitential, something about Jerome Powell wakes up my long-dormant inner Marxist.”

And with regional bank and homebuilding pile ups only just starting to unravel as loan growth slows and the cost to physique creeps up, Cramer had a hard time believing the theory that the count hikes were already priced into the broader market.

“A stop to kidding yourself if you think all the bad news is baked in. You don’t get these kinds of refuses if it is — and I’m not even including the Italian budget crisis, which I’m sure the reconcile oneself ti will call out tomorrow,” he said. “And you’ve got to accept that we could be acquisition bargaining a stock of the Fed’s next victim if we’re not careful. That’s a frightening place to be, and until human being accept that fear, the market will not find its long-term base.”