Jim Kramer sees signs of easing inflationary pressures and believes the Fed’s approach is right

Jim Kramer told CNBC on Tuesday that he was encouraged by a number of inflation-related developments, arguing that they further reinforce the view of Federal Reserve Chairman Jerome Powell that many price pressures will be temporary.

The Mad Money presenter pointed to declining prices for chemicals that serve as the “building blocks” of the economy, such as polyethylene, and the fact that oil is “stuck” at the mid to low $ 80 a barrel instead of breakdown. about $ 100, as some had predicted.

“I don’t think Powell needs to slow down the economy,” Kramer said, referring to proposals that the central bank should raise interest rates in response to the hot inflation data. “Despite what you hear from inflationists and the media, the weight of the evidence is finally in Powell’s favor – the interim team will win.”

Kramer said there are additional reasons for this belief, such as Morgan Stanley research note on improving production at Malaysian semiconductor factories known as fabs. This should help alleviate the chip shortage that has hurt key industries like the auto industry and has driven prices up for used cars, Kramer said.

“I know that Taiwan Semi, the largest foundry in the world, hasn’t done that yet. He still has a problem, he still does not produce enough chips, and Malaysian factories cannot make up the deficit, ”said Kramer. “But do you know how quickly the prices of used cars will fall when automakers can ramp up production of new ones?” he asked rhetorically.

Another worrying supply chain issue – congestion in US ports – is also undergoing improvement, Kramer said. He referred to Bloomberg report on tuesday that the number of remaining freight containers at the Port of Los Angeles fell 29%.

“Can we really ignore this number? Remember, the White House has taken all sorts of steps to sort out the port situation. I don’t think they are completely useless, ”he said.

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