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Stock Market Today With Jim Cramer: FOMC Taper Tantrum

Jim Cramer has advice for investors should the Federal Reserve decide to taper and markets sell off.

U.S. stocks were showing some volatility Monday, starting the day off in the green before giving up gains, ahead of a key meeting of the Federal Reserve later this week. 

The S&P 500 on Friday posted its second consecutive record close with investors assessing the Federal Reserve's stance that inflation spikes will prove transitory. The S&P 500 rose 0.4% last week.

Cramer on Post-Fed Meeting 'Taper Tantrum'

Jim Cramer's Action Alerts PLUS investing club has the cash on hand to take advantage of a potential post-Fed-meeting market selloff, should Chairman Jerome Power signal that the U.S. central bank is ready to begin tapering its balance sheet. 

The general Wall Street expectation is that the labor market has not progressed enough to warrant the Fed becoming less involved in the economy.

“It’s too early for the Federal Open Market Committee to begin the 'taper clock,'" Goldman Sachs said in a recent note ahead of the start of the meeting on June 15. 

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Goldman does not expect Powell to deliver the first hint at tapering in June, but rather later this year in August or September.

"Powell likely agrees with Gov. [Lael] Brainard and President [John] Williams that the labor market has not yet come far enough," the firm said. 

Cramer Says Buy This Stock if Taper Does Happen

Jim Cramer does not expect the Federal Reserve to change its monetary policy, but should the Fed decide to begin unloading assets and markets fall, Caterpillar  (CAT) - Get Report could be a good target for buyers of the dip. 

Cramer said taper trades mostly affect commodities, but he specifically cited Caterpillar and some of the other stocks he follows.