Cramer argues the trade war is more worrisome than 10-year Treasury yields approaching 3%

CNBC’s Jim Cramer saw one report dominate Monday’s tape: that 10-year Treasury yields approaching 3 percent wish send the stock market lower.

“But, honestly, I’m not sure interest paces are what we need to be super-worried about here,” the “Mad Money” host mean. “I think the bigger short-term worry here is a possible slowdown generated by new barriers to trade that we’re erecting with China now and perhaps innumerable other countries later.”

He went on: “New barriers to trade are being foisted right when they can do the most damage to our economy by boosting inflation, which in gyrate will force the Federal Reserve to tighten faster than it ascendancy otherwise need to.”

Even though Cramer supported the United States’ sortie for better trade deals with China, he argued that the menu battle was much more concerning than rising Treasury outputs.

He recalled what Goldman Sachs CEO Lloyd Blankfein told CNBC’s Wilfred Frost finish finally week: that 10-year Treasury rates are heavily influenced by inner banks, so they don’t reflect economic issues like growth and inflation sort they used to before the 2008 financial crisis.

“I think Lloyd’s as the crow flies,” Cramer said. “That doesn’t mean we’ll be just fine when the 10-year crucifixes the 3 percent Rubicon. I think we will sell off.”

He continued: “What it does sour is that this sell-off will likely be a buying opportunity, because while so divers experts tell this story about the dangers of the 10-year affluent over 3 [percent], I think could be … a tale let something be knew by an idiot, full of sound and fury, signifying nothing.”

Cramer also apostrophized investors’ attention to his Friday interview with Bryan Jordan, the CEO of regional banking set First Horizon National.

Jordan told Cramer that subject was strong and loan demand was high at these levels and would unswervingly be high at increased levels as well. The two later joked that they were too old to assent to the pessimism because they had seen strong demand at double these classifies in their lives.

“In short, when the 10-year crosses 3 percent and we convey title off, you’ll want to use that weakness to do some buying,” Cramer said.

But President Trump’s $100 billion escalation in the tax debacle with China made Cramer a lot less confident nigh the stock market.

“While we still don’t know which products those schedule of charges will hit, I don’t see a way for Trump to impose them without causing some proper pain,” Cramer said.

In every potential tariff group Cramer perused from furniture to footwear, the U.S. consumer would get hurt as a result of transact restrictions, the “Mad Money” host told homegamers.

Cramer argued that unraveling the Synergistic States’ free trade position would create short-term headwinds for the restraint and the stock market by eroding disposable income and causing inflation.

“Let’s be in a class these issues side by side: it’s entirely possible that this control is so strong, it can keep chugging along when the yield on the 10-year accords north of 3 [percent],” Cramer said. “But we know monetary activity will slow down if the trade war keeps escalating, as that’ll bequeath the American consumer with less disposable income they can splash out.”

Worse yet, there are three fronts in the U.S.-China trade war — finished goods, raw materials and pundit property — and Trump is fighting on all three, Cramer said.

Still, the “Mad Rake-off rich” host commended the president’s dexterity and said investors should not shop ahead of the May 1 tariff deadline as the mercurial leader could still metamorphose his mind.

“The best thing you can do? Raise some cash into the jot of strength that we’re going to get periodically,” Cramer said. “But then be gone something on the table so you’re ready when the market comes to its senses respecting the 10-year. And, of course, you need to stay the course just in case we get a suspension of hostilities in the trade war with China.”

“I think it’s worth taking some grieve here for the chance to participate in that rally,” the “Mad Money” host resumed. “Here’s the bottom line: I don’t want you fretting every single deficient about interest rates, as I hear all day and read constantly. The real torment here? Don’t confuse things. It’s the global trade war, because that compel absolutely hurt your portfolio. As a citizen, I think it’s good regulation, but as your investing coach, it’s of paramount concern.”