CNBC’s Jim Cramer on Monday told investors why he thinks President Donald Trump’s unprecedented effort to remove a Federal Reserve Board governor won’t substantially impact the market.
“There have been so many shocking things coming from the White House that they’re no longer shocking,” he said. “At some point, this stuff gets priced in.”
On Monday, Trump announced he had fired Fed Governor Lisa Cook, citing allegations she made false statements on applications for home mortgages. Cook, who was appointed to her position by former President Joe Biden, said Trump did not have cause to fire her and that she would not resign. The Fed said it would accept the court’s decision about Cook’s termination, CNBC reported.
Trump’s attempt to remove Cook marks an escalation of his attacks on the central bank and its independence. The president has repeatedly criticized the Fed — especially Chair Jerome Powell — for refusing to cut interest rates. Trump said Tuesday he would soon have a “majority” of his own nominees to support his wish to lower rates.
Stocks climbed during Tuesday’s session as investors largely shook off Trump’s latest effort to assert dominance over the Fed. The Dow Jones Industrial Average closed up 0.30%, the S&P 500 increased 0.41% and the Nasdaq Composite added 0.44%.
According to Cramer, the Fed should be independent from the president because a central bank controlled by a president or prime minister usually results in higher inflation. But he suggested that Trump’s action doesn’t matter to many investors because it has little to do with more market-moving events set to take place this week — namely earnings from artificial intelligence giant Nvidia.
Cramer said he wants a central bank that “looks at the evidence and tries to do the right thing regardless of the president,” adding that he’s not trying to minimize the significance of Trump’s efforts to control the organization. However, when it comes to making money on the market, he said Nvidia’s new chip and whether customers will make money using it is more important.
“Look, for pretty much my entire career, if somebody told you to sell stocks because of a headline from Washington, you would have been dead wrong,” he said. “We already went through this in Trump’s first term.”
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