CNBC’s Jim Cramer on Tuesday called on Federal Reserve Chair Jerome Powell to implement aggressive interest rate increases to curb inflation.
“Jay Powell can’t solve the war in Ukraine. He can’t get more oil out of the ground…the same goes for the other big source of inflation, food,” “Mad Money” host said.
He added: “He has to hit us with some big price hikes to smooth things out while selling, I hope, at least $200 billion in bonds a month – double the current schedule – just to fix a problem that he’s not of his making.” .
His comments come as the Federal Reserve begins its June meeting to determine the size of the next rate hike, which will be announced on Wednesday.
The Federal Reserve, which raised rates by 25 basis points in March and 50 basis points in May, will also start offloading some of its balance sheet on Wednesday in an effort to drain trillions of dollars of liquidity from the financial system.
Investors and central bank policymakers alike are preparing for a 75 basis point rate hike on Wednesday. The market reacted accordingly as the S&P 500 slid further into bearish territory on Tuesday while the Nasdaq Composite and Dow Jones Industrial Average also remained choppy.
Inflation hit new highs in May as prices rose 8.6% from a year ago in the fastest increase in more than four decades, also driving the market’s latest slump.
Cramer has called for a 100 basis point rate hike in recent weeks, and Powell urged stronger action even as he argued that the Fed chair was not to blame for the current state of inflation.
“Looking back, the Fed provided more liquidity than it needed. It should have stopped buying bonds over a year ago. … But far from selling trillions of bonds to rein in the economy and raising interest rates to calm what can be calmed — that’s not much “We have to stop blaming Powell for everything about inflation,” he said. Kramer said.