Jim Cramer says he doesn’t see the economy falling into stagflation. He thinks we just got overheated coming out of the pandemic and now need time to cool off.
There aren’t many dirty words on Wall Street, but stagflation is one of them, Jim Cramer told his Mad Money viewers Wednesday. With stagflation, you get the worst of both worlds, an economic slowdown and rampant inflation. Fortunately, Cramer doesn’t see our economy falling into stagflation. Instead, he said, we just got overheated coming out of the pandemic and now need time to cool off.
That cooling is already starting to happen. Yesterday, we learned that Target (TGT) – Get Target Corporation Report had too much inventory. Wednesday, we saw mortgage applications fall to their lowest level in 20 years. A mortgage at 5.4% is still low historically, but compared to where we’ve been, with rates as low as 2%, we may be headed towards a housing glut as well.
Adding to Cramer’s excitement was news that used car prices may also be beginning to moderate.
If hard goods, mortgages and autos all peak, that only leaves oil and energy to lead the inflation charge. Crude oil is a tough one, however, as prices are skyrocketing from a lack of supply.
The White House could embrace oil producers and oil pipelines, but it’s highly unlikely given their hostility towards the industry to date. That means lower oil prices aren’t likely to come until demand falls on its own from high prices.
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