CNBC’s Jim Cramer warned Monday that the market rally will be temporary until the economy cools down.
“Now we can get a bounce back. But unless there is other data to show that the Fed has actually won the battle against inflation, rates will continue to rise relentlessly and the rise will be very short lived. “I will,” he said.
Stocks fell on Monday before producer and consumer price index data were released later this week. This gives a clearer picture of the state of inflation. The Nasdaq Composite’s loss this year is more than 32% after Monday’s drop, and the S&P 500 is down more than 24% so far this year.
In 2022, markets were disrupted by soaring inflation, Fed rate hikes, Russia’s invasion of Ukraine, and recession fears.
But Cramer says the market is still a long way from bottoming out. He has previously said the Fed needs to ease inflation in three key areas to stop it from wreaking havoc on the markets.
“The market is severely oversold and until we have softer data on wages, food and housing, we must treat all these rises as head-fakes.