‘Powell is doing a really good job’

U.S. equities are up roughly 2.0% on Wednesday after the U.S. Bureau of Labour Statistics said consumer prices were up 8.50% (year-over-year) in July.

Jim Cramer reacts to inflation data on CNBC

In comparison, economists had expected the CPI to come in at a higher 8.70%. Reacting to the data on CNBC’s “Squawk Box”, Jim Cramer reiterated that the worst is indeed behind us.

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Lot of the numbers have come down. Energy has come down, price at the pumps has come down, travel has come down, used cars have come down. What obviously have peak inflation and I think Jay Powell is doing a really good job.

Versus a month-ago, gasoline was down 7.7% in July, which was, however, offset by a 1.1% increase in food prices. Core inflation (excluding food and energy) was up 5.9% YoY versus 6.1% expected.

What to expect from the Fed in September?

Consumer prices, nonetheless, were still near their forty-year high especially as shelter costs remained 5.7% above last year. Still, Cramer no longer sees a need for another 75-bps increase in September.

These are the numbers that Powell wanted. He still raises in September because he wants to be sure he wins. But he does 50 not 75. There’s no reason to do 75. If he does, people will think he knows something we don’t, and I don’t think he does.

On a monthly basis, inflation was flat in July versus a 0.2% increase expected.

The benchmark index is now trading just below a level that BTIG says is critical to changing the trend in favour of the bulls. From its low in mid-June, S&P 500 is now up nearly 15%.