Jim Cramer says Russia’s invasion of Ukraine could put more pressure on Fed to raise interest rates

The Federal Reserve faces more pressure to increase interest rates as Russia’s invasion of Ukraine hinders a market already hit hard by inflation, CNBC’s Jim Cramer said Monday.

“The war over Ukraine just makes the inflation situation worse. A shortage in oil is already leading to higher prices at the pump,” the “Mad Money” host said, adding that Ukraine’s role as a top exporter of wheat and corn could also drive up grain prices. “That means the Fed will be under even more pressure to raise interest rates.”

“In the end I think that we have to choose, not between Russia or Ukraine or a hardline Fed versus softline Fed, but whether stocks have gone down enough to be able to handle what either Powell or Putin throws at us,” he added.

Cramer’s comments come after the stock market remained volatile on Monday and continued to react to Russia’s invasion of Ukraine. The Dow Jones Industrial Average dropped around 0.49% while the S&P 500 closed down 0.24%. The Nasdaq gained 0.41% after a late-day rally. 

Ukrainian and Russian officials completed a round of talks on Monday with Belarus, and say there could be more negotiations coming.

Cramer urged investors to “get used to” the developing situation with Russia, including the economic sanctions U.S. and European officials are continuing to put on them, and throw away the assumption that Russia’s invasion will slow down the global economy.

When Jay Powell goes in front of Congress on Wednesday and Thursday, he’s likely to extend sympathy to the people of Ukraine, as I do, but I don’t see him relenting in his mission to” ease inflationary pressures, Cramer said, referring to Fed Chairman Jerome Powell.

However, the host added that there’s still time for investors to take advantage of rallies like the one late last week.

“I’m in favor of raising some cash, which is always a good idea if you don’t have any … We’re in a seasonally strong moment,” Cramer said.