Cramer says new AI technology can’t help bring down inflation just yet

CNBC’s Jim Cramer on Monday reminded investors that much of the stock market currently depends on the Federal Reserve’s interest rate decisions, which are hard to predict as inflation persists. He said he is hopeful new artificial intelligence technology will help cut costs, but stressed that it will not happen any time soon.

“We keep thinking that accelerated computing and generative AI will solve so many of our problems, and eventually they will, but the emphasis is on ‘eventually,'” he said. “In the near term, it won’t have any impact on the stuff we’re worried about that’s front and center, not in a time frame that matters to the Fed.”

To Cramer, AI will be a game changer. It has the potential to improve productivity and make items such as groceries and medicine cheaper, helping the consumer’s balance sheet. But the technology is not at a point where it can immediately fix high costs in sectors such as insurance, homes and apparel, he said.

This week brings new inflation data: the producer price index on Tuesday and the consumer price index on Wednesday. But because it is difficult to get these metrics under control and they have been running hotter than the Fed wants to see, Cramer suggested investors stick with stocks that are not as influenced by interest rates.

“Right now, at this moment, everything is on the verge,” he said. “But what’s before the verge? Well, the answer is all sorts of inflationary numbers that may drive up interest rates, making us feel like it’s too dicey a moment to invest in stocks.”