CNBC’s Jim Cramer reminded investors Thursday that stock market pain is unfortunately necessary for the Federal Reserve to win against inflation.
“Nobody wants to root for layoffs or low stock prices. But the alternative is relentlessly high inflation—endless price increases for everything—and nobody wants that,” he said.
Stocks fell on Thursday despite the Fed’s aggressive interest rate hikes to cushion rising prices, as fresh data indicated.
Cramer explained that while the Fed needs to make it so that companies can no longer raise prices for goods and services, it is inevitable that such an outcome will hurt portfolios.
“Low home prices – that’s good if you’re looking for a home, but it’s terrible if you have shares in a homebuilder.” lenar” he said as an example. “In other words, there is no free lunch for you, the investor.”
And while it is unclear when the central bank will be able to roll back its interest rate hike and stop hurting the market, he said the release of the non-farm payrolls report on Friday would shed more light on the inflation situation.
“If it doesn’t show higher unemployment without wage growth, the Fed will need to aggressively hike interest rates,” Cramer said.