Cramer Calls May CPI 'Artificial Inflation' Amid Iran
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- May headline CPI rose 4.2% year over year, matching estimates and marking the highest reading since April 2023's 4.9%
- Core CPI (excluding food and energy) advanced 2.9%, also matching estimates and the highest since February's 3.1%
- Jim Cramer called the inflation 'artificial' and 'not real' on CNBC, attributing the energy-driven outliers to the Iran war and saying the numbers will 'look pretty good' once it ends
- President Trump echoed the sentiment, telling reporters 'I love it, the numbers were great' and tying inflation relief to ending the war and pulling 'millions of barrels of oil' off the market
- Airfares within the May CPI surged 26.7% year over year, illustrating how fuel costs cascade through to consumer prices
- CME FedWatch still prices near certainty on rates holding at next week's meeting, with about 40% odds on at least one rate hike by year end despite the 'good' core print
- Kevin Warsh chairs his first Fed meeting next week after Trump's Jan. 30 nomination; he previously served as a Fed governor from 2006 to 2011
- SpaceX begins trading Friday, with Anthropic and OpenAI IPOs also looming — the supply wave Cramer said has him 'far more worried' about stocks than inflation
Why it matters: Warsh's first Fed meeting lands with about 40% odds of a rate hike already priced in by year end, meaning even a manageable core print does not lock in the rate-cut path Trump has demanded — and a flood of SpaceX, Anthropic, and OpenAI supply means equity investors face a dual test of inflation optics and speculative froth unwinding simultaneously.
