CNBC’s Jim Cramer said on Thursday that inflation could come down soon, based on chart analysis by legendary tech Larry Williams.
“The charts, as interpreted by Larry Williams, suggest that inflation may soon cool significantly – soon – if history is any guide,” he said.
The ‘Mad Money’ host’s comments come after the Federal Reserve hiked interest rates another 75 basis points on Wednesday and reiterated its hawkish stance against inflation.
To explain Williams’ analysis, the “Mad Money” host first looked at a chart of the Federal Reserve’s current consumer price index (in black) versus the explosion of the inflation in the late 1970s and early 1980s (in red).
Williams notes that the current trajectory of sticky price inflation has closely followed this historical pattern, Cramer said.
He added that when it was in the pattern of inflation in the late 1970s and early 1980s, current inflation was around the 1980 point in the path – which is the when inflation peaked at the time.
“Today, unlike then, the Fed knows exactly how to beat inflation, and Jay Powell has shown he’s ready to do some harm. That means it should peak sooner,” Cramer said.
For more analysis, watch Cramer’s full explanation below.