U.S. inflation was up 0.1% in August: ‘I’m looking at futures and saying buy’

S&P 500 is down nearly 3.0% on Tuesday after the U.S. Bureau of Labour Statistics said consumer prices were up 8.30% (year-on-year) in August.

Jim Cramer reacts to the inflation data

In comparison, economists had forecast the CPI to come in at a lower 8.0%. Still, famed investor Jim Cramer remains constructive on the equities market. This morning on CNBC’s “Squawk Box”, he said:

I’m looking at the futures and just saying buy. We’re looking at the companies’ stocks falling short even as almost every one of these numbers will be lower one month from now. I’m not concerned that the Fed will overdo it. That’s bogus.

Core inflation (excluding food and energy) was up 6.30% year-on-year versus 6.0% expected. The 2-year Treasury Yield climbed to near 3.80% following the CPI print.

The benchmark index is now down roughly 8.0% from its recent high.

Inflation was up month-over-month

It’s particularly interesting that Cramer continues to recommend investing in the S&P 500 since inflation was actually up 0.1% for the month even though energy prices were down 5.0%.

Experts had forecast headline inflation to be down 0.1% instead. But food and shelter resulted in a hotter-than-expected reading. But Cramer noted:

The sell-off is happening because it looks like the Fed is somehow behind the curve. This nonsense has to stop. We’re seeing not peak inflation, but inflation that can be dealt with by the Fed. Give me one darn stock that should be down on this.

The U.S. Federal Reserve is scheduled for its next policy meeting on September 21st. After today’s report, it’s almost certain that the central bank will again raise by 75 basis points.

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