CNBC’s Jim Cramer said on Wednesday that investors should assess stocks individually rather than by fear of an impending recession, after the Federal Reserve indicated it could take a softer approach to raising interest rates.
“The Fed seems to be out of the way until its next meeting in September — maybe they’re ahead of the game, even — with the data starting to get its way,” said the “Mad Money” host.
“So let’s look at it on a case-by-case basis and I bet with a softer background, the best earnings are rewarded with higher stock prices, while the declines in everything else could end up being more muted,” he added.
The Fed raised interest rates by 0.75 percentage points on Wednesday in a bid to curb inflation. Chairman Jerome Powell said in a news conference that the central bank could raise interest rates by another 0.75 percentage point in September, but that decision depends on what economic data shows.
All major averages closed for the day, with tech names leading the way after Alphabet and Microsoft missed revenue and earnings, yet reported better than feared results elsewhere.
Cramer theorized that the Fed will be able to achieve a soft landing by taking a data-driven approach.
“We now know that Powell doesn’t want to cause a recession and doesn’t think he should cause a recession, so there is an advantage to the bulls here, mainly because he has caught up with the curve and may be over it,” he said. he said.
Disclosure: Cramer’s Charitable Trust owns shares of Alphabet and Microsoft.