CNBC's Jim Cramer, usually an advocate for lower interest rates, on Tuesday ripped the Federal Reserve's decision to cut interest rates in the face of a public health crisis as a "wrong" move that won't stop stocks from sliding.

"Because a rate cut is not responsive. It does next to nothing to deal with the illnesses, cancellations and economic fallout from this epidemic," the "Mad Money" host said.

The emergency half-a-percentage point rate cut, which Fed Chair Jerome Powell announced in the morning, did not appease investors worried how the spread of the COVID-19 coronavirus could affect corporate earnings. The Dow Jones Industrial Average plunged nearly 786 points, or 2.94%, during the session. The S&P 500 and Nasdaq Composite both also dropped almost 3%.

"The problem here is that we have a public health crisis that could do real damage to vast swaths of the economy," Cramer said. "A rate cut doesn't change that. It's not a cure."

The Fed's cut to the benchmark funds rate, to a target range between 1% and 1.25%, is a "sign of panic" and that the coronavirus epidemic will be "very bad for our economy," Cramer warned. The 50 basis-point cut, he suggested, illustrates that Powell is "terrified" that the unemployment rate in the U.S. could jump.

The rate cut did nothing to boost business confidence, said Cramer, a self-proclaimed monetary policy dove. The host is usually a promoter of lower interest rates — notably in 2007 and in 2018 — but argued Tuesday that the Fed's move put more pressure on the bond market.

The yield on the closely watched U.S. 10-year Treasury was a hair below 1% late Tuesday.

"The Fed's actions today told you that they expect a gigantic cessation of economic activity," spooking investors and pushing them to sell stocks, Cramer said. "I've told you again and again: Lower bond yields equals lower stock prices."

The Dow rallied hard, almost 1,300 points, the day prior as investors anticipated that the Fed could cut rates in the near future. The rally came after stocks labored through a treacherous week of trading.

The emergency rate cut was the first in more than a decade. The move came two weeks before the Fed plans to hold its March meeting.

In his Tuesday morning announcement, Powell said the coronavirus outbreak presented "risks to the economy" and that the central bank "chose to act" because of the uncertainty.