CNBC's Jim Cramer reminded investors Monday that much of the stock market currently depends on the Federal Reserve's interest rate decisions, which are difficult to predict as inflation continues. He said he hopes new artificial intelligence technology will help reduce costs, but stressed it won't happen soon.
“We continue to think that accelerated computing and generative AI will solve many problems, and eventually they will, but the emphasis is on 'eventually.' ” he said. “In the short term, it's not an important time frame for the Fed and it won't have any impact on the top things we're concerned about.”
For Cramer, AI will be a game changer. Productivity increases and items such as food and medicine become cheaper, potentially improving balance sheets for consumers. But the technology is not yet at the stage where it can immediately solve high costs in sectors such as insurance, housing and apparel, he said.
This week, new inflation data will be released: the Producer Price Index on Tuesday and the Consumer Price Index on Wednesday. But these metrics are difficult to control and have risen more than the Fed expects, so Cramer suggested investors stick to stocks that are less sensitive to interest rates.
“Right now, in this moment, everything is at stake,” he said. “But what lies ahead of the brink? Well, the answer is all sorts of inflation numbers that could drive interest rates up, making it too risky a time to invest in equities.” It makes us feel that there is.”
