After Anthony Gordon was sent off just before halftime, Newcastle fought back from 2-0 down to draw level before Rio Nguhoma struck Liverpool's winner ten minutes into injury-time.
"I think what we've seen tonight is possibly one of the worst performances from a winning team and one of the best performances from a losing team," Carragher later said on Sky Sports.
"Liverpool won't care right now, of course, they'll be absolutely ecstatic, but Eddie Howe's men tonight were absolutely outstanding.
"It did (seem like it was over at 2-0), but that crowd, that intensity they played with, I actually fear what the score might have been if it had been 11 vs 11. I think Newcastle would've won the game - they were far better than Liverpool in every aspect."