Fed chief Powell ushers in a ‘new leg to the bull’ market

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CNBC’s Jim Cramer said Thursday that Federal Reserve Chairman Jerome Powell’s hints of an interest rate cut could spark the beginning of a “new leg to the bull” market in stocks.

“We change the inverted yield curve back to where it should be, our rates are way too high, and next thing you know we’ve got a real bull market going,” Cramer said on “Squawk Box. ” “I think that’s going to happen, a new leg to the bull.”

U.S. stocks opened higher Thursday after the S&P 500 on Wednesday briefly broke above 3,000 for the first time ever before finishing just shy of another record close. The S&P 500 went back above 3,000 early Thursday.

Powell on Wednesday gave stocks a boost, bolstering the case for a rate cut later this month, in an appearance before the House Financial Services Committee.

Cramer said later Thursday on “Squawk on the Street ” that Powell should be cutting rates despite this week’s positive corporate earning reports “because there is enough that is weaker in the economy” and inflation remains persistently low.

Powell’s inflation target “is not going to be met,” the “Mad Money” host added.

Inflation has been running below the Fed’s 2% objective and “crosscurrents, such as trade tensions and concerns about global growth, have been weighing on economic activity and the outlook,” Powell said in his testimony Wednesday.

Investors will be watching for any changes in tone from Powell during a question-and-answer session as he goes before the Senate Banking Committee on Thursday.

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