Jim Cramer On 'Fed Heads' That Want To Raise Rates: They Want To 'Tip Us Into A Definitive Recession'

Prominent market commentator Jim Cramer reportedly told investors on Wednesday the Federal Reserve needs to calm down and not make a hasty decision about rate hikes that could make the market even worse.

"There are plenty of Fed heads who believe they need to keep raising interest rates, rather than take their time to assess the situation," Cramer said according to a CNBC report.

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"They don't want to wait, they simply want to tip us into a definitive recession. I think their view is reckless simply because we are in an incredibly strange situation and we don't have all the facts. Maybe the Fed needs to tighten more, but would it kill them to wait another month or two?" he questioned.

U.S. markets ended in the red on Wednesday after strong labor data sparked investor concerns about further rate hikes by the central bank. There were 1.8 job openings for every unemployed person in April, up from 1.7 in the previous month. The SPDR S&P 500 ETF Trust SPY closed 0.55% lower on Wednesday while the Invesco QQQ Trust Series 1 QQQ shed 0.57%.

Cramer noted that although the economy may seem great from a surface-level view with housing prices booming, significant jobs available and the travel and leisure sector being robust, these facts are misleading because, except for a few big winners, most industries are suffering.

"Everything else has gotten soft — everything — to the point where maybe the strength in housing and wages should be tempered by the data from everything else," Cramer said, according to the report.

Lay-offs: The market expert pointed out that many industry giants are sending out warning signs that the Fed should not ignore, especially brick-and-mortar retailers, which are witnessing "discouraging earnings and almost uniformly tepid forecasts." He also stressed that the central bank's rate hikes so far haven't even helped bring down mortgages and rolling lay-offs seem to be plaguing most industries.

"Is it really worth it to raise interest rates in order to cool down housing, when recent rate hikes haven't done a thing to make mortgages more expensive? Does it really make sense for the Fed to spur on more lay-offs when the lay-off wave's already growing?" he questioned. "We don't know whether or not the Fed's winning. So why not wait? Beats the heck out of me."

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