“Negative rates, no. We don’t want negative rates. That’s just a sign that we’re not a robust economy,” said Cramer, reacting to Trump’s early morning tweet, in which the president called the Powell-led Fed “boneheads” and urged central bankers get rates “down to ZERO, or less.”
On “Squawk on the Street,” Cramer jokingly said he would not call Powell and other members of the Fed “boneheads,” but the “Mad Money” did reiterate his criticism of the Fed chief’s reluctance to embrace a more aggressive cutting posture as many countries around the world have gone negative with their rates.
The Fed is set to meet next Tuesday and Wednesday. Central bankers are widely expected to cut the fed funds overnight bank lending rate by a quarter-point for the second time this year. The current target range for fed funds is 2% to 2.25%. The Fed’s July rate cut was the first such move in more than 10 years. Powell and his fellow central bankers have been in the president’s cross-hairs even since they hiked rates four times last year.
In his Wednesday tweet, Trump also wrote that with borrowing rates so low in the U.S. and around the world the government should “refinance our debt.” He added, “INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term.”
Cramer, who has repeatedly expressed support for government bonds with longer durations of than the current 30-year Treasury, said the president has a point.
“I talked about a 50-year bond that we’d all love to ‘make our roads great again,'” Cramer said Wednesday. The reference to “roads” was a suggestion to use the proceeds from such a bond sale to finance infrastructure projects.