Fed rate hikes widen wealth gap by hurting working Americans

CNBC’s Jim Cramer, a critic for months of the Federal Reserve‘s path higher for interest rates, said Thursday that the central bank led by Jerome Powell is taking money out of the pockets of working Americans.

“The rich people won,” Cramer contended on “Squawk on the Street.” “We had seven years when the rich got really rich,” while the middle class struggled for a decade with stagnant wages. “They didn’t make their money during the period where you could make money,” he added.

Wealthy people can better afford to take shelter in money market accounts because they don’t have to chase yield to make money, Cramer said. “They can buy CDs now. They can sell all they want. You get 3.5 [percent rates]. I bought some 3.5 [percent] CDs yesterday, and I feel pretty good. They’re out five years, and I’m older now, and I’m not trying to hit it out of the park with index funds.”

Cramer said he was disheartened by the Fed and Chairman Powell’s decision Wednesday to increase rates for the fourth time in 2018, and to project two more hikes for next year. The “Mad Money” host, in keeping with his recent commentary, blasted Powell for continuing to not recognize signs of a slowing economy and inflation being under control. Both reasons, he has said, should put the Fed on hold.

On his show Wednesday evening, Cramer said: “The only people who should be really happy about this statements are the rich: your wealth will be preserved. If you work for a living, you’re probably getting a raise after a lost decade of wage growth. Powell wants to put a stop to that.”

“Yay, the rich don’t have to worry; don’t have to worry about a slowdown. Because do you know why? You only have to get rich once. But the not-so-rich, sorry,” said Cramer. In Powell’s “dogmatic world, you’re making too much money as it is.”

The Fed decline to comment on Cramer’s remarks.

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