CNBC’s Jim Cramer said Friday that the Federal Reserve’s attempts to crush inflation by raising interest rates will also inevitably bring down “formerly high-flying stocks” – even those that are “legitimate” companies.

The stock market is “a major risk to containing inflation. It’s not just collateral damage, it’s one of [Fed Chair Jay Powell’s] targets. Not every stock, but certainly the ones with shaky valuation underpinnings that were trading through the roof on sales or even orders,”  the “Mad Money” host said.

“While we wait for the Fed to finish hitting the brakes, the formerly high-flying stocks with no earnings and little sales will keep drifting lower and lower and lower, because they represent still one more front” in controlling inflation, he added.

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Stocks fell on Friday, though to a lesser degree than Thursday’s downturn, with both days overtaking the rally that came after the Fed’s meeting on Wednesday.

The Fed raised interest rates by 50 basis points and noted implementing larger rate hikes “is not something the committee is actively considering” to control inflation.

“I don’t think Powell is deliberately trying to tamp down on the irrational exuberance in specific stocks like a Shopify or … HubSpot, or Toast or Bill.com. They’re all legitimate companies, it’s just that their valuations were way too high, and that froth helped fuel the over-inflated IPO and SPAC bubble,” he said, referring to initial public offerings and special purpose acquisition companies.

Still, Cramer said that high-quality companies with real products, profits and value for shareholders have done well during the Fed’s tightening, and he believes the economy overall is strong enough to take even a 100-basis point rate hike.

“Powell took the possibility of a 75-basis point rate hike off the table. I see that as a mistake. … To me, it’s just much better to get the pain over with as fast as possible,” he said.

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