Jim Cramer says price stability is just around the corner

CNBC’s Jim Cramer said on Thursday that the Federal Reserve is closer to winning the battle against inflation than Wall Street might believe.

“Price stability … is just around the corner,” he said, adding that the Fed “just needs to know that there’s really only one strong point left in this whole economy.”

Stocks fell on Thursday, reversing gains as Wall Street’s fears of a central bank rate hike overshadowed strong corporate earnings.

Cramer explained that there is confusion about whether the Fed has lowered inflation enough due to the bifurcation in the economy between the service sector, which is on the rise, and the goods sector, which is in decline.

An additional factor is that the wealthy in general have not seen the fall in purchasing power, which has allowed them to continue spending on both travel and retail, he added.

” Bed Bath and mores of the world, most likely, will not return. But expensive ones like Tiffany bought LVMXthey crush him,” he said. “But that doesn’t reflect the real economy.”

In other words, according to Cramer, the disproportionate spending of people with high incomes is likely to cloud the true state of inflation.

“May be [Fed Chair] Jay Powell has made more progress in fighting inflation than [his] colleagues want to believe, except in this one area,” he said.