Tags: jim cramer | fed | economy | turn | dime

Jim Cramer Warns Fed: Economy Can 'Turn Down on a Dime'

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By    |   Sunday, 28 October 2018 07:00 AM

Investment guru Jim Cramer recently warned Federal Reserve Chairman Jerome Powell that the central bank could hurt the thriving Trump economy if it continues to hike interest rates.

"The economy can turn down on a dime," Cramer said on CNBC. "We saw it turn up on a dime, it's going down on a dime."

Cramer said said stocks are now starting to "build in the possibility" of profits being crimped by a worldwide slowdown, CNBC explained.

"You can't have a sustained rally unless something changes in Washington," Cramer said Thursday. "Unless we resolve Washington, then all these great earnings are for naught."

To be sure, while shares surged on Thursday,  stocks resumed their selloff on Friday, with the S&P poised to join the Nasdaq in correction territory, sparked by grim earnings reports from Alphabet and Amazon that eclipsed data showing the U.S. economy continued to grow at a healthy clip, Reuters explained.

While the U.S. economy continues to grow, despite trade wars, the same cannot be said of U.S. corporate profit growth, with a slew of disappointing forecasts this earnings season showing how tariffs, rising wages and borrowing costs, as well as jitters over geopolitical events are hitting companies.

Meanwhile, solid third-quarter growth is expected to keep the Fed on course to raise interest rates again in December, despite a recent tightening in financial market conditions brought about by a stock market sell-off and a rise in U.S. Treasury yields, Reuters reported.

The Fed raised rates in September for the third time this year and removed a reference to monetary policy remaining “accommodative” from its policy statement.

The GDP report showed the Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) price index excluding food and energy, increased at a 1.6 percent rate in the third quarter. The core PCE price index rose at a 2.1 percent pace in the April-June period.

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Investment guru Jim Cramer recently warned Federal Reserve Chairman Jerome Powell that the central bank could hurt the thriving Trump economy if it continues to hike interest rates.
jim cramer, fed, economy, turn, dime
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2018-00-28
Sunday, 28 October 2018 07:00 AM
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