The

Federal Reserve

wants what Goldilocks wants, an economy that's not too hot and not too cold, said Jim Cramer on his

"RealMoney" radio show Tuesday.

It's too hot right now, in part because there's still speculation in a handful of areas, Cramer said; and Ben Bernanke, chairman of the central bank, recently made statements at a conference that lead Fed watchers to believe that another interest rate hike is coming on June 29.

The Fed has only one blunt instrument to quell speculation in a sector, and that is to raise interest rates, Cramer said. While this makes it more expensive for speculators, it also makes it more expensive for everyone, and kills all sectors just to cool off one, he added.

Prior to Bernanke's statements, some economists had speculated that the Fed would not raise rates at the end of the month -- but not Cramer.

Cramer said that the central bank has a track record of calling it wrong and taking rates too high and that he had no reason to believe that things will be different this time.

In 1998, the Fed said economy was way too hot and that it had to tighten rates, but soon after had to cut rates, Cramer said.

And in March of 2000, with the economy rolling over and dot-coms falling apart, the bank took short-term rates to 6.5%, and caused a recession, he added.

They were wrong then, and they can be wrong again, Cramer said.

"It is not a Federal Reserve blind to what is happening. ... I think that what might be going on is that the Fed chairman is trying to cool speculation with talk rather than by raising rates and hurting the economy," Cramer said.

Either way, he said that it's a fool's game to wait for a clear signal from the Fed. They've never given an all clear signal, he said, so it's no good to try and anticipate when they will stop raising rates.

Instead, he said now is the time to understand that this bad market is taking down even the good sectors such as aerospace, oil and gold, and that this panic is like a falling knife.

Don't try to catch the knife, he said. Wait for things to fall and then buy a little of the good stuff that got taken down, he said.

But Cramer warned listeners to only buy a little bit at a time, which is what he's doing for his charitable trust

Action Alerts PLUS.

He also said that only a diversified portfolio will get you through these tough times.

To see the most recent edition of The RealMoney Radio Recap in its entirety, please click here. This recap is published every day around 3 p.m. ET.

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