Jim Cramer says congressional spending bills could make inflation worse, but remains optimistic

CNBC’s Jim Cramer said Wednesday that the two giant spending bills in Congress have him worried about the path of inflation.

“I’m still a bull: I’ve been optimistic since June when I saw that commodities were going in the right direction. And I’d be pretty sure about wage inflation, too, if it wasn’t for Congress,” the “Mad Money.” said the host.

“If the rebranded stimulus bill doesn’t pass, we have nothing to worry about, but if it does, we can only hope it will take years and years for the government to put that money to work,” he added. , referring to the Inflation Reduction Act of 2022.

The bill represents a move by Democrats to reform the tax code, combat climate change and lower health care costs. The bill, which is a revival of President Joe Biden’s Build Back Better bill, will invest more than $400 billion and reduce the deficit by $300 billion over a period of a decade.

Cramer said he is also concerned about how CHIPS and the Science Act of 2022 could increase inflation, stating that their higher-than-expected price raises concerns about the Fed’s next moves.

Congress approved the bill, intended to boost domestic chip production and research, in late July. While the star of the show is the $52 billion in subsidies to US companies that produce computer chips, the package costs $280 million in total.

Complicating Cramer’s concerns about inflation are aggressive comments on inflation from Fed leaders on Wednesday, suggesting the central bank must continue to take aggressive action to slow the economy.

“I don’t want others to lose their jobs or their homes… I have no idea how [Fed Chair] Jay Powell can stop spending trillions of dollars just when we have the lowest unemployment rate in decades,” Cramer said.

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