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NEW YORK ( TheStreet) -- The Federal Reserve signaled it's staying the course and you should, too, Jim Cramer told "Mad Money" viewers Wednesday as he responded to the Fed's decision to leave interest rates alone and not repeat history.
Cramer said there's no denying that some parts of the U.S. economy, such as retail and housing, are heating up in a big way. But as Caterpillar (CAT) and FedEx (FDX) both showed us today, other parts of the economy -- mainly manufacturing and exports -- still have a long way to go.
So why would Fed Chairman Ben Bernanke risk raising interest rates when clearly the economy isn't completely back on its feet? Add to that the looming sequester, which promises to lay off thousands of government workers, and it's easy to see why Bernanke has chosen to be cautious, Cramer said.
But more than that, Bernanke is a student of history and is attuned to the mistakes made in 1937, when the government threw our post-Depression economy back into recession by jumping the gun on increasing taxes and interest rates. That recession, he noted, was only stemmed by World War II.Add it all together and, Cramer said, it is easy to see why Bernanke has chosen to stay stock market-friendly and why his public goal of not raising rates until unemployment hits 6.5% may well remain in effect until, well, it does indeed hit 6.5%. That's why Cramer remains bullish on the sectors that are working, mainly the regional banks along with retail and tech, while advising investors to avoid manufacturing and anything that exports to the rest of the world.
Executive Decision: Ken PowellIn the "Executive Decision" segment, Cramer spoke with Ken Powell, chairman and CEO of food giant General Mills (GIS - Get Report), which delivered a seven-cent-a-share earnings beat on a 7.5% rise in revenue today after seeing strength across all regions of the globe. Powell said last year General Mills was faced with high food inflation and a consumer who wasn't buying a lot. This year, inflation is moderate and the economy is doing better, both of which have led General Mills to prosper. He said his company plans on continuing its marketing efforts and growing its advertising in line with its sales growth.
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