CNBC’s Jim Kramer said Tuesday’s market gains must fall so that the Federal Reserve can beat inflation as soon as possible.
“Right now, the best result would be for the averages to drop quickly, so [Fed Chair Jay Powell] it could be over, “he said.
“Powell had better hope that this cycle would not continue, otherwise these prices of beach houses, new construction jobs,” Lenar housing, processed food stocks and oil prices will not fall and remain down soon, “he added, referring to the home builder’s warning in his latest profit call that buyers had withdrawn against current housing prices, as sales slow in some markets.
Shares rose on Tuesday after the market closed on Monday due to the June 16 holiday. While the rally was a welcome respite for investors following last week’s downturns, many fear the return will be short-lived as fears of a recession loom over Wall Street.
Kramer said that while he usually supports higher stock prices, the Fed needs a downturn in the market so that inflation can also fall. The reason, he said, is that the downturn will cut costs and keep people in the job market.
“In recent years, hefty stock market profits have allowed winners to spend like crazy,” he said.
“If Powell manages to make this market fall and stay down, taking away much of that profit, then the rich are less likely to spend aggressively and many are more likely to stay in the workforce when they would otherwise retire. He added.