CNBC’s Jim Cramer explained why an uncertain macroeconomic environment led the Federal Reserve to hold interest rates steady — dashing the hopes of many investors and President Donald Trump.

“In short, the backdrop’s just too darned mixed for the Fed to take action,” Cramer said. “That’s also why Powell pretty much punted on that forecast, because who knows what the heck the future’s going to like? Certainly not the Federal Reserve, which is why they’re so reluctant to make a move until they know more.”

Stocks slipped on Wednesday as investors digested Fed Chair Jerome Powell’s comments. Powell said higher tariffs have affected the prices of some goods, but their overall impact on the economy and inflation remains unclear. While he did say it’s possible tariff-induced inflation could be “short lived,” he also warned that the new duties could lead to “more persistent” inflationary changes.

“Our obligation is to keep longer term … inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” Powell said.

Cramer said he understands why Powell is reluctant. By historical standards, Cramer explained, it seems unreasonable to cut rates — the labor market is strong, there is healthy GDP growth and there is little indication of prices coming down. For now, he continued, it seems companies are absorbing the cost of tariffs. But Cramer said they could still pass the price on to consumers, and “no Fed chief wants to be the guy who cuts too early and lets inflation make a comeback.”

But there is a case for rate cuts, Cramer said, pointing to the “intractable” price of housing which “refuses to come down.” He added that it’s possible the consumer is getting weaker. Cramer pointed to disappointing earnings from three household names that reported on Tuesday — UPS, Stanley Black & Decker and Whirlpool. However, Visa — which relies heavily on consumer spending — posted a strong quarter on Wednesday, he said. He also pointed out that Starbucks just reported that business is starting to come back after a downturn.

Cramer added that some investors were discouraged not only because the Fed held rates steady, but because it did not suggest that cuts were on the horizon.

“I think this market fell apart today because the Fed seems reluctant to give us that rate cut backstop,” he said. “I didn’t get the sense of the so-called inevitability of rate cuts that I felt from the last two fed meetings. Judging by the action, not many others did, either.”