According to Jim Cramer, the Fed is beating inflation despite a hot June CPI.

CNBC’s Jim Cramer said on Wednesday that while consumer prices rose faster than Wall Street expected in June, the Federal Reserve is close to beating inflation.

“I think we have a real chance of hitting … a short-term bottom here, given that the Federal Reserve can probably make another big rate hike and then declare a win,” the Mad Money host said.

“I know it sounds crazy to say that we are winning the war on inflation when the CPI, the consumer price index, rose 9.1% last month, but you know what, I believe in it,” he added.

The consumer price index, which measures the prices of everyday goods and services in the US, rose 9.1% in June from a year earlier. Bureau of Labor Statistics.

Major indexes closed slightly lower on Wednesday after fluctuating during the trading session.

Cramer said he believes inflation has peaked despite a hot inflation report due to recent declines in oil and other commodity prices.

“I don’t think aluminium, copper, steel and lumber should necessarily be considered consumer-oriented, but I will say this: see below. All these goods are in emergency mode,” he said.

He added that other signs that consumers are starting to cut back on their spending, including a glut of inventory challenging retailers and a cooling housing market, support his theory.

“All of this tells me that anyone who has looked at today’s CPI reading and said, ‘Hey, I have to sell because there’s a big one coming, it’s time for the Fed to raise rates to 10%’… I think you will absolutely wrong,” he said.

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