"Mad Money" Host Disagrees With Latest Rate Hike But Sees Potential in Gold

Jim Cramer believes latest rate hike was ill-advised.

Last week, the Federal Reserve met market expectations by raising the borrowing rate another 25 basis points, reported CNBC, bringing it to a total of 2.5%. Addressing the public after the hike, Fed officials hinted towards less hikes in 2019 but appeared confident in their decision to raise rates four times this year.

According to the CNBC article, even before the latest hike, many criticized the Fed for ignoring important data metrics and instead, powering through with their agenda. Just days ahead of the hike, President Trump took to Twitter to criticize the Fed's policy amid a possible slowdown of the U.S. economy.

In Thursday's episode of "Mad Money", CNBC host Jim Cramer underlined why this month's hike was ill-advised, especially in the context of additional rate hikes in 2019. Additionally, he pointed out that the central bank's hawkish tone can only persist through willful oversight of important data.

This includes a projection for slower GDP growth in 2019 and the looming threat of maxed-out employment. According to the article, some have also felt as if the Fed is turning a blind eye to the recent stock crashes and what they might mean for the economy going forward.

To Cramer, the last point is especially poignant as stock investors have been placed on thin ice by the Fed's hawkish rhetoric. The host shared his view that equity investment right now hinges on the chance that Fed Chair Jerome Powell becomes more recipient towards red flags and simmers down on tightening.

Despite the concerning implications of future rate hikes, Cramer reminded viewers that there is always a profitable market out there. After four rate hikes in 2018 and promises of several more next year, Cramer sees little alternative to gold investment as the best possible bet.

The analyst said we will see a bull market in gold as the true state of the economy becomes apparent, reports CNBC. In particular, Cramer pointed to several sliding stocks as proof that the economy is slowing down faster than Fed officials would like to admit.

While rate hikes are considered bad for gold, the markets usually price in future hikes months before they happen, alleviating any downside to the metal. With so many cautioning against the consequences of successive rate hikes in a slowing economy, what is usually seen as a headwind could act as the catalyst for the next bull run in gold, stated the article. Cramer certainly seems to think so, as the host compared his feelings of distress post-hike to the tense atmosphere of 2007, right before the global financial crisis hit.