Jim Cramer says to ‘hope for the best, prepare for the worst’ ahead of October CPI report

CNBC’s Jim Cramer on Tuesday gave investors his expectations for the October CPI report.

“Maybe this time will be different, and it could be. … But right now when it comes to the CPI, I think we’re in a hope for the best, prepare for the worst situation,” he said.

The consumer price index measures prices consumers pay for a variety of goods and services. Investors will be watching for any signs that inflation is cooling down in the October CPI report, which is set to be released Thursday morning. 

The October CPI reading could give clues as to whether the Federal Reserve will adjust its pace of interest rate hikes in December. The report also has implications for the stock market, which is already jumpy this week due to the U.S. midterm elections on Tuesday.

“We’re all worried about the consumer price index — every time this key inflation number comes in too hot, interest rates soar and stocks plummet,” Cramer said, adding that many inputs for the report including food and energy are already too high.

But what’s most concerning is that current CPI estimates don’t seem to factor in the multiple price increases companies have implemented, according to Cramer. 

“What I don’t understand is how the consensus simply can’t seem to take these higher prices into account. The numbers always seem to come in too low, like the people who put the forecasts together have never been to a supermarket,” he said.