When Powell says the economy has slowed, that's good news, says Jim Cramer

CNBC’s Jim Cramer stated the Federal Reserve’s resolution to hold rates steady is a win for the bulls and is an indication the tightening cycle is coming to an finish. With inflation easing and the potential for rate cuts subsequent 12 months, Cramer stated the financial system has managed a tender touchdown and extra sectors are able to soar.

“Sure, the easy money has been made in a couple of sectors — mostly tech — but now it’s time for a bunch of other sectors to shine, the economically sensitive ones that were supposed to be crushed by an inevitable recession,” Cramer stated. “These stocks aren’t liked. May I suggest you cotton to them because the plane has landed, our seatbelts are unbuckled, we’re going down the gangway, calling an Uber and getting the heck out of the airport.”

The Fed held its key rate of interest regular for the third straight time, and committee members indicated there may very well be not less than three fee cuts in 2024.

Some on Wall Road fear this Fed motion suggests there is a recession on the horizon, however Cramer stated it might be clever to disregard this outlook, including {that a} strong labor report on Friday signifies the opposite. To Cramer, potential fee cuts would imply “smooth sailing” for shares, with buyers changing into much less serious about bonds.

Though the market has been up for weeks, Cramer stated there’s nonetheless cash to be made in cyclical shares and sectors that profit from decrease rates of interest reminiscent of homebuilders, autos and financials. Cramer recommended shopping for financials which have hit lows lately, together with Bank of America, JPMorgan Chase and even regional banks that suffered after the banking disaster in March. He additionally named Caterpillar, Stanley Black & Decker, Ford and General Motors.

“Not only is the Fed no longer our enemy, it’s much more likely to become our pal, assuming the economy stays on its current, slower course,” Cramer stated. “This is the about-face that the bulls were waiting for.”