CNBC's Jim Cramer calls on Powell to cut rates after jobs report

“That is when you cut.”

After a lackluster July jobs report showing just 73,000 new jobs prompted CNBC’s Jim Cramer to urge Fed Chair Powell to cut interest rates, warning that stagnant wages and weak job growth signal an urgent need for monetary policy action.

CNBC’s Jim Cramer called on Federal Reserve Chairman Jerome Powell to cut interest rates following a disappointing July jobs report that revealed nonfarm payroll growth of only 73,000, well below the 100,000 economists had forecasted. Speaking on “Squawk on the Street,” Cramer highlighted the report’s troubling details, including downward revisions of 258,000 jobs for May and June, an unemployment rate rising to 4.2%, and average hourly earnings growing just 3.9% year-over-year, slightly above estimates. He argued that the combination of minimal job growth and stagnant wages creates a clear case for rate cuts, stating, “That is when you cut.” Cramer, a long-time supporter of Powell, expressed frustration, suggesting the Fed’s decision to hold rates steady at 4.25%–4.5% for the fifth consecutive meeting was a missed opportunity.

The weak jobs data, released before markets opened, fueled speculation about the Fed’s next moves, with the CME’s FedWatch tool showing market odds of a September rate cut jumping from 38% to nearly 79% in a single day. Powell’s Wednesday comments indicated the Fed would monitor incoming data to assess risks, but the jobs report may pressure the central bank to act sooner. Cramer’s critique came amid broader economic concerns, including President Donald Trump’s new tariff plans, which introduced “reciprocal” duties of 10% to 41%. These tariffs, signed into effect Thursday night, contributed to a market selloff, with the S&P 500 and Nasdaq falling over 1.5% and 2%, respectively, and the 10-year Treasury yield dropping to 4.25%, its lowest in nearly a month.

Cramer’s remarks reflect growing unease about the economy’s trajectory, as the jobs report underscored a slowdown in hiring and wage growth. He emphasized that the Fed’s caution, driven by fears of tariff-induced inflation, could exacerbate economic weakness if rates remain unchanged. The combination of soft labor data and trade policy uncertainty has rattled investors, with Cramer describing the jobs figure as “shocking” and a signal that Powell should not have delayed rate cuts. As markets brace for further volatility, the focus remains on whether the Fed will adjust its stance at its September meeting to address the economy’s faltering momentum.