CNBC host Jim Cramer has suggested that the Federal Reserve’s concerns about inflation may be outdated, as recent data indicates a cooling economy.
What Happened: Cramer, on his show “Mad Money,” pointed out that the economy has shown signs of cooling since the Fed’s last meeting, reported CNBC on Wednesday. He highlighted that the recent consumer price index was weaker than expected, and the labor report indicated a slowdown.
"For the part of the market that was consumer-oriented, today was a day when the Fed won. Let's hope the Fed conclave realizes that their inflation lamentation from three weeks ago may no longer be necessary," he said. "If they don't … then we might have quite a few more days like this one."
He noted that during the last meeting, the economy was experiencing “nascent commodity inflation,” but now, oil prices are declining. Cramer also mentioned that copper prices slumped on Wednesday, and shares from the U.S.’s largest copper producer, Freeport-McMoRan, sank.
“If the Fed had seen these numbers ahead of time … there would have been a lot less hand-wringing,” he said. “The minutes might have actually been positive.”
He also warned that if the Fed continues to focus on outdated data, the market may see more days like the one that saw a decline in major averages.
Why It Matters: The Fed’s concerns about inflation have been a hot topic in recent weeks. The release of the Fed’s minutes last week sparked worries about the possibility of “higher-for-longer” interest rates, leading to a dip in the stock market. However, Cramer’s analysis suggests that the situation may not be as dire as it seems.
These developments could have a significant impact on the market, especially in light of recent discussions about the potential for high interest rates being here to stay. Cramer’s analysis provides a different perspective on the situation, suggesting that the market may be more resilient than previously thought.
Moreover, Cramer’s comments come at a time when investors are optimistic about the stock market, buoyed by expectations of decreasing inflation and potential rate cuts. Cramer’s analysis could further fuel this optimism, potentially leading to a shift in market sentiment.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
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