Mad Money w/ Jim Cramer 9/16/26

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Jim Cramer (1:01)

My mission is simple, to make you money.

I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it.

SPEAKER_4 (1:12)

Mad Money starts now. Hey, I'm Cramer.

Jim Cramer (1:19)

Welcome to a special West Coast edition of Mad Money. Welcome to Cramer America. Other people want to make friends, I'm just trying to save a little bit of money. My job is not just to entertain, but to do some teaching, too. So call me at 1-800-743-CBC. Tweet me at Jim Cramer.

If you buy stocks here, you are now, as of today, officially fighting the Fed Reserve.

That's what happens when the Fed decides to raise rates as it did this very afternoon. The first rate hike of a quarter of a percent creates a lot of confusion, and often a quick dive, which is exactly what we saw today. I mean, just...

And that produces selling. We aren't sure if there's going to be multiple hikes, which would be really bad for the stock market, or we're only going to get one, maybe two. Not so bad for the market. From the looks of things and the harsh words we heard today from the new Fed chief, Kevin Marsh, we're going to get many hikes until the job is done, the job being slowing inflation appreciably. And that is why the Dow plunged 631 points, the S&SB lost 0.4 or 5 percent, but the Nasdaq fell only 0.01 percent, and that was a nice comeback. More on that in a moment. So even as I'm out here in the West Coast, where these rates mean very little because tech does thrive no matter what, let me explain why this decision was ripe for the longer term, but miserable for the shorter term, and why the stock market may need to take a hit beyond today if inflation doesn't settle down. Big if. First, understand this economy does have a real head of steam, mostly because of the great data center build out. These behemoths are beasts when it comes to capital, to expenditures, and you know what? I still think they will be house of pleasure when the smoke clears from the rate hike.

See, they're distorting the economy, but there's no sign that the data center strength is slackening and rates won't impact it all that much. And that's true for tech earnings. The growth will most likely continue apace. Employment is full, which is fantastic for the stock market. Lots of discretionary income, lots of savings and lots of spending. I know we keep waiting for AI to destroy jobs, but right now, this cycle is creating jobs by the second, mostly trade jobs, and the economy does keep strengthening.

But there's a real downside to the build out, too, and that's what we heard today from Warsh. We have an economy that isn't used to working with its hands. Service jobs make up two-thirds of the workforce. When you have the biggest capital expenditure cycle in history, one that involves endless bond sales, referenced today by the Fed chief in his speech, and lots of stock offerings, you're going to get hit with too much inflation, and the Fed does have to pump the brakes. And that's what started today. Ordinarily, we could probably handle that level of inflation to build out causes, but these are not ordinary times. We already had good, I'd say pretty predominant inflation. We're three and changed. That's way too high historically. Our new Fed chief is a serious person, and he's been on bringing the rate down to 2% by 2029 Even though President Trump picked him to cut rates, well, he knows that we need to keep inflation down to preserve the buying power of the dollar and the net worth of your savings.