Jim Cramer says there’s a ‘real possibility’ the Fed can engineer a soft landing

CNBC’s Jim Cramer on Tuesday said that he believes the Federal Reserve could manage to tamp down inflation without throwing the economy into a recession.

“If we can see the end of the purchasing spree … it’s a huge positive for stocks. It helps that we’ve finally worked out the kinks in the supply chain that were creating shortages all over the place. Put it all together, and there’s a real possibility the Fed can indeed engineer that fabled soft landing for the economy,” he said.

Stocks rose on Tuesday after October producer price index data indicated that inflation is cooling, just one week after a lighter-than-expected consumer price index report spurred a rally.

“The market hung in there, even in the face of some incredibly negative headlines,” Cramer said, pointing to the Associated Press’ report that Russian missiles crossed into Poland, the FTX crypto collapse and uncertainty about the outcome of the U.S. midterm elections as examples.  

He added that in addition to the market’s resilience, retailers likely had to offload their inventory at low prices last month, which could result in another deflationary tailwind. October retail sales data is set for release on Wednesday.

“That’s good for Ollie‘s, great for TJX … terrific for the consumer, amazing for the Fed, and therefore perfect for investors. The ultimate bad is a good Christmas story,” he said.

Disclaimer: Cramer’s Charitable Trust owns shares of TJX Companies.