Cramer's 'Mad Money' Recap: Fed Gets a Clue

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Market players got what they needed from the Federal Reserve, and the market rallied today, Jim Cramer said on his "Mad Money" TV show Tuesday.

The Fed decided to keep the interest rate unchanged at 5.25%.

It's actually reassuring not to hear from Fed that things are falling apart, he said. At some point after Cramer shouted at chief Ben Bernanke to "open the discount window" and cut short-term interest rates on CNBC's "Stop Trading!" last Friday there was a shift. "We are now creeping toward a rate cut," Cramer said.

The Fed knows there's a problem, he said. "It's no longer in denial, and that is a pretty good thing to hear." It's a good thing the Fed acknowledged that the downside risk is higher and that credit situations have become tighter, Cramer said.

The market heard what the Fed said, and even though the Fed might not act for a while, the market now knows it will act.

The Fed also hinted at government intervention, he said. Cramer believes that the Treasury secretary -- or even the president -- can ask Fannie Mae (FNM Quote - Cramer on FNM - Stock Picks), which was set up to relieve tight credit conditions for some households, to take action to avert a disaster. Cramer owns Fannie for his charitable trust, Action Alerts PLUS.

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