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Since the Federal Reserve lowered the boom on interest rates last week, there's been a greater need for investors to use caution, Jim Cramer warned his Mad Money viewers Wednesday. After another big down day on Wall Street, Cramer said the panic is palpable -- which makes it the perfect time to formulate your game plan.

Sellers outweighed the buyers 10-to-1, a sign that normally signals the bottom is at hand. But Cramer said he's concerned the selling is not over and we'll see even more weakness ahead.

The impact of Fed Chairman Jay Powell's comments last week cannot be overstated, Cramer reiterated. The Fed should be a measured, data-driven institution -- not one that adheres to a single philosophy at all costs. It was that kind of hubris that helped usher in the financial crisis of 2008, Cramer said, and while today's economy is nothing like 2008, the Fed can certainly usher in a slowdown or recession.

Powell is simply wrong in his assessment that the economy is red hot and must be stopped at all costs, Cramer said. Weakness is popping up everywhere. You only need to listen to find it.

Homebuilders are seeing sluggishness now that mortgage rates have topped 5%. Chemical and plastics companies like PPG Industries (PPG) - Get PPG Industries, Inc. Report have hit a wall. Bank lending has slowed. And there's a glut of semiconductors, so much so that Cramer said he no longer trusts Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report or Nvidia (NVDA) - Get NVIDIA Corporation Report . Add to that a trade war and a strong dollar and there's plenty to signal the Fed to slow down.

What will turn the markets around? Cramer said Powell needs to walk back his comments and assure investors he's looking at the data. Second, oil prices need to come down to help the industrials and transports. Third, we need to see some relief in transportation, where regulations have created a driver shortage. Finally, we need a ceasefire in the trade wars.

All of these things will take time, Cramer admitted, which is why he sees more weakness ahead. 

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A Correction Is a Terrible Thing to Waste

A vicious correction is a terrible things to waste, Cramer told viewers. That's why, despite the continued weakness that's likely in the next day or so, Cramer would start doing a little buying.

Of course, all of the usual Mad Money rules apply: Only buy high-quality companies. Buy in small increments on the way down. And make sure you understand that your first buy will not be your last.

If you're patient and you're selective, selloffs are the opportune time to buy, Cramer concluded, especially with full employment and an economy that's still got some life left in it. 

Over on Real Money, Cramer says only buy these names if you like the fundamentals. Get more of his insights with a free trial subscription to Real Money.

Follow the Activist?

When the markets enter a tailspin, investors often look for stocks with activist investors behind them. After all, if a very smart, very rich money manager gets behind a company, shouldn't you?

In the case of Nelson Peltz, who recently took a stake in PPG Industries (PPG) - Get PPG Industries, Inc. Report , Cramer said he's skeptical. The company has been stuck in the mud since its new CEO took over and he doesn't see their end markets improving.

Activist Bill Ackman got involved with Starbucks (SBUX) - Get Starbucks Corporation Report , but Cramer said Ackman has little to offer the company. Cramer still likes Starbucks, but based on it's own merits, not on Ackman's involvement.

TheStreet Recommends

Finally there's Campbell Soup (CPB) - Get Campbell Soup Company Report , which caught the eye of activist Dan Loeb. Here, Cramer said the activist can actually make a difference. If Loeb wins the fight with Campbell's board of directors, it could be a big win for the company.

Each activist situation is different, Cramer concluded, and since activists aren't required to tell the public when they change their minds and exit a position, they should never be followed blindly. 

Executive Decision: Carnival Corp. 

In his "Executive Decision" segment, Cramer again sat down with Arnold Donald, president and CEO of Carnival Corp.  (CCL) - Get Carnival Corporation Report , a stock that's down 12% from its recent highs as investors worry about rising fuel costs and additional competition.

Donald reminded viewers that "one day does not a trendline make," and fortunately for the cruise lines, they provide a great value for vacationers in any economic environment. There will always be peaks and valleys, he said, but in the end, it's his job to deliver results year after year.

When asked about weather, fuel prices and competition, Donald said there are major weather events every year and fuel price fluctuations every year. That's why they operate across the globe, diverting ships and assets to where the demand is. They do everything they can to educate investors on what makes Carnival so special. 

Executive Decision: Starwood Capital 

For his "Executive Decision" segment, Cramer sat down with Barry Sternlicht, chairman and CEO of Starwood Capital Group (STWD) - Get Starwood Property Trust, Inc. Report , the REIT with a 9.2% yield.

Sternlicht said he's never understood the market's valuation for his company. He said they offer a diversified portfolio with a safe dividend yield and they're the largest commercial lender that's not bank affiliated. Starwood has a 62% loan-to-value and can make more money as interest rates rise.

When asked for an outlook on the U.S. economy, Sternlicht said that construction costs are rising for materials and labor and new construction starts are coming down. Values for high-end residential properties are also starting to falter.

When asked what a potential Sears Holdings (SHLD) bankruptcy would mean for mall-based retailers, Sternlicht said no retailer wants to be next to Sears and a bankruptcy would be a net positive as stores get repurposed for more exciting, and profitable, ventures.

Finally, Sternlicht added that the effects of tariffs won't be felt until 2019, which will make the economy not as strong as the numbers make it appear.

Lightning Round

In the Lightning Round, Cramer was bullish on ConAgra Foods (CAG) - Get Conagra Brands, Inc. Report , FireEye (FEYE) - Get FireEye, Inc. Report , Becton Dickinson (BDX) - Get Becton, Dickinson and Company Report and Loxo Oncology (LOXO) - Get Loxo Oncology Inc Report .

Cramer was bearish on Caterpillar (CAT) - Get Caterpillar Inc. Report and Alibaba (BABA) - Get Alibaba Group Holding Ltd. Sponsored ADR Report .

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At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.