Tonight during the


chat I had with

Bill Fleckenstein

, we were struck by the simplicity of one question, one stunning question that we all must answer: Surely the market is "worse" than it was before these rate hikes, so isn't it logical to believe that the market will be lower, not higher, in the future?

I am paraphrasing the question, which should be available in

transcript form later this evening. But the simple nub of the question not only can't be ignored, it is central to the real worries we have at our firm.

Until we see definitive signs of a slowdown, we have to expect that the market will be hard-pressed to make new highs. New highs just seem unlikely, given the damage that higher rates do to the system. Individual stocks that are not leveraged to the economy can make new highs as they are not going to fall prey to higher rates. But most companies do worse in this environment, not better. Despite the oblivious nature of

Buzz and Batch, a prime rate that is now at 9.5% will slow down building and construction and deal making. The cost of money does matter.

So why buy stocks? Because, as I said over and over in the

1994 series, if the economy slows, this


hike will be the last Fed hike and you have to buy the last Fed hike with reckless abandon. Do I think it is the last Fed hike? Check the series. I said the Fed doesn't even know that. Do I think that the economy is slowing down? Yes. Is it slowing down fast enough to please the Fed? Maybe -- after this hike, it is. What happens if we get a slowdown? The Fed gets off our back.

What is missing here is


. We need time for earnings to catch up to multiples. We need time for the hikes to slow things down. We need time for the economy to cool. Only then will it be right to go to new highs again. And any time we try to rush that, you can bet we will just be met with more rate hikes, and one of these hikes is going to tip the balance between people putting money in the market and putting it in cash.

Let's hope, for the bull's sake, it doesn't have to get that far.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at