Earnings reports show the Fed is making progress on inflation

Recent earnings reports show that the Fed is finally making progress in curbing inflation, says Cramer

CNBC’s Jim Cramer told investors on Thursday that the market is finally seeing signs that the Federal Reserve is succeeding in its fight against inflation.

“We are now finally making progress in the war against inflation and progress is this market’s most important product,” he said.

Shares fell for a second straight day on mixed earnings reports that prevented the market from reviving the rallies from earlier in the week.

Among the companies reporting this week are trucking and freight companies, whose dismal quarters and forecasts suggest the Fed’s fight against inflation is starting to take a toll on them, according to Cramer.

Here are some examples:

  • JB Hunt reported better-than-expected profit and revenue for its latest quarter, but said it is struggling to secure equipment. The company also warned of uncertainty surrounding macroeconomic headwinds.
  • Knight-Swift Transport reported an earnings miss and cut its full-year results, forecasting a tepid fourth-quarter shipping season.
  • Union Pacific missed estimates on freight revenue and cargo volume for the third quarter and cut its full-year forecast, warning of higher costs.

“The important thing is that freight rates continue to fall, which means the Fed is making progress in the war on inflation,” Cramer said.

He added that it is only a matter of time before wage growth, a huge headwind for the Fed, comes down.

“When business slows down, nobody’s going to talk about the truck driver shortage. Another win for the Fed,” he said.

Jim Cramer gives his take on Thursday's market action

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