The Market Has Decided a Recession Is Coming, Says Mad Money’s Jim Cramer

Mad Money host, Jim Cramer, says that the market has already decided that the Federal Reserve “will be tighter and create a recession no matter what.” Cramer also recently said we are in a bull market, advising investors to buy the dip.

Jim Cramer on the Recession

Jim Cramer, host of CNBC’s Mad Money show, believes that the market has already decided that the US economy will be in a recession. Cramer is a former hedge fund manager who co-founded TheStreet.com, a financial news and literacy website.

Cramer tweeted on Monday:

It doesn’t take long for this market to turn negative. It has already re-digested Friday’s news and decided that the Fed will tighten and create a recession no matter what.

The Federal Reserve raised its benchmark interest rate by 25 basis points last week, following a series of 75 basis point hikes. Shares rose after the Fed’s announcement. In addition, new data released Friday by the Bureau of Labor Statistics showed 517,000 new jobs were added in January and the unemployment rate fell from 3.5% to 3.4%, a level not seen since May 1969. However, Cramer saw the S&P 500 fall slightly on Monday morning.

Not many people are expecting America to go into recession. Treasury Secretary Janet Yellen said Monday on ABC’s Good Morning America: “When you have 500,000 jobs and the lowest unemployment rate in 50 years you don’t have a recession.” In addition, global investment bank Goldman Sachs on Monday cut the chance of the US entering a recession in the next 12 months from 35% to 25%. “Continued strength in the labor market and early signs of an improvement in the business survey suggest that recession risks have abated significantly in the near term,” Goldman Sachs wrote.

‘We are in a bull market’

Many people pointed out on Twitter that Cramer recently said that we are in a bull market. The Mad Money host explained on Jan. 31 that the market’s profit potential on the back of a strong earnings report suggests it has more room to run. In contrast, “a bear market goes in the opposite direction — stocks open, then fall and you feel humiliated. Good earnings mean nothing but a price target cut,” Cramer said, adding:

If we are in a bull market, and I think we are, then you have to prepare yourself… We have to be ready for days of decline right now because there are buying opportunities in a bull market.

He concluded: “Even if it doesn’t turn upside down today, it always will tomorrow, so don’t think about betting against it.”

Do you agree with Mad Money’s Jim Cramer? Let us know in the comments section below.