On Wednesday, CNBC’s Jim Cramer explained the importance of the December Consumer Price Index report for investors.
“What makes tomorrow’s consumer price index a big deal? It’s simple: we’re looking to see if we’re nearing the end of the period when companies can raise prices by all impunity,” he said.
Cramer has previously said the Fed needs to crush corporate pricing power in order to defeat inflation.
The December Consumer Price Index report is due out 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 Federal Reserve’s interest rate hikes would be successful in taming inflation.
Cramer said that despite Wall Street’s new found optimism, it’s possible the December CPI figure will bring bad news for the economy – and for companies that are expected to report quarterly results in the coming weeks.
“Unless inflation is falling in the right places, this earnings season could be very difficult,” he said.