Jim Cramer Says Even 'Safety' Stocks Look Risky, Warns Of 'Wild Card' In Washington And Rising Treasury Yields As Reasons To Stay Away From Sure Bets

Jim Cramer thinks that the bond market now offers a clearer risk-reward trade-off than so-called "safety" stocks, warning that rising 10-year Treasury yields and a political "wild card" in Washington make even dividend stalwarts feel shaky.

What Happened: The 10-year Treasury yield's jump to its highest level in more than a month has tightened the spread between bond payouts and blue-chip dividends, dulling the appeal of AbbVie ABBV, Johnson & Johnson JNJ, Procter & Gamble PG and Colgate-Palmolive CL, Cramer told CNBC’s ‘Mad Money’ viewers on Wednesday.

"In a very uncertain tape for what used to be called ‘safety stocks,' I'd rather just own a piece of paper like the 10-year Treasury, where, if worst comes to worst, at least I get my money back," Cramer said.

Cramer flagged Robert F. Kennedy Jr., newly installed as Health and Human Services secretary, as an unpredictable force who could clamp down on pharmaceutical pricing and food additives. "Investors don't know whether Kennedy will act in favor of the companies he's tasked with regulating," he cautioned.

What To Know: That uncertainty compounds existing headaches. Johnson & Johnson is still wrestling with talc-related lawsuits that have already cost billions in settlements and reserves, a cloud Wall Street fears could grow heavier if bond yields keep luring income-seekers away. AbbVie's rich dividend likewise looks less generous when a risk-free Treasury pays nearly the same rate with zero headline risk.

Consumer staples aren't immune either, says Cramer. Procter & Gamble and Colgate boast recession-proof brands, yet their 2–3% yields no longer tower over Treasuries, and Cramer said "the yields may simply not be high enough to justify the risk."

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Snack titan PepsiCo PEP and cereal maker General Mills GIS could also come under fire if Kennedy pushes to restrict artificial colors and other additives, Cramer warned, asking rhetorically whether kids would still eat Lucky Charms without its rainbow marshmallows.

Why It Matters: For now, Cramer said he is "tempted to buy General Mills" on weakness, but fears Washington's next pitch more than the stock's upside.

Cramer also told "Mad Money" viewers that recession worries can be a buying opportunity, saying high-quality retailers look cheap so long as you don't think the economy will "fall off a cliff." Despite earlier warning, the sector was in the trade-war "blast radius," he now does have a couple of clear favorites to scoop up on any dip.

Benzinga Edge Stock Rankings indicate Johnson & Johnson has a Momentum in the 47th percentile and Growth in the 63rd, how do other “safety” stocks rank in terms of these metrics? Check them out here.