CNBC’s Jim Cramer on Wednesday broke down the significance of December’s CPI report for investors.
“What makes tomorrow’s CPI figure a big deal? It’s simple: we’re looking to see if we’re getting close to the end of the period when companies can raise prices with impunity,” he said.
Cramer previously said the Fed must break corporate pricing power to defeat inflation.
The December consumer price index report is due to be released on Thursday. The index shows how the prices of goods and services have changed in a given month. Economists polled by Dow Jones expect the December CPI report to show prices down 0.1% from the previous month.
Stocks rose on Wednesday as investors grew more confident that the US Federal Reserve’s rate hikes will be successful in curbing inflation.
Cramer said that despite Wall Street’s newfound optimism, it’s possible that December’s CPI number could bring bad news for the economy — and for companies that are due to release their earnings results in the coming weeks.
“If inflation doesn’t come down in the right places, this earnings season could be very tough,” he said.
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