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Cramer: Fed didn't do 'its homework' and is now forced to hike rates this month

Berkeley Lovelace Jr.
However, Cramer, whose charitable trust owns shares of Apple, says he likes the stock over the long term.

The Federal Reserve has to hike interest rates later this month or risk the market thinking there's "something really wrong," CNBC's Jim Cramer contended Monday, doubling down on his comments from late last week.

The central bank has put itself in a box by not "doing its homework" prior to Fed Chairman Jerome Powell 's remarks on Oct. 3 that rates were a "long way" from so-called neutral, Cramer said on " Fast Money Halftime Report ." If the Fed doesn't hike next week, "then we just think there's something really wrong that we don't know about," he added.

Cramer has been critical of Powell ever since his comments in October. But in a speech last month, Powell appeared to walk back those remarks, saying rates are "just below" neutral, suggesting that concerns about a more aggressive path higher for rates may no longer be warranted.

The Fed has already hiked rates three times this year, and the market and Cramer expect another one at the Fed's Dec. 18-19 meeting. The target range for the central bank's benchmark federal funds rate, which banks charge each other for overnight lending, stands at 2 percent to 2.25 percent.

The Fed also "risks its credibility" if it doesn't raise rates, Cramer said. The central bank has taken heat from President Donald Trump , who has blamed its policies for recent stock market declines.

Cramer, the host of " Mad Money ," spoke as stocks were sharply lower . Equities sold off last week, with the Dow, S&P 500 and Nasdaq seeing their worst week since late March.

On Friday, Cramer said the Fed could cause "panic" on Wall Street if it reneges on its anticipated rate hike this month.

The Fed did not immediately respond to CNBC's request for comment.