Jim Cramer: The factors driving inflation are 'still winning the race' right now



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On Tuesday's episode of "Mad Money," host Jim Cramer discussed the causes driving inflation in the U.S. and explained why those price pressures are still "winning the race" for now. Sign up and learn more about the CNBC Investing Club with Jim Cramer https://cnb.cx/3Ei22n4

CNBC’s Jim Cramer said Tuesday he expects some of the inflationary pressures in the U.S. economy to remain at problematic levels for a little longer before relief arrives.

“As I peel the layers off the rising prices, I keep finding deliberate rules and processes that are safer and cleaner and less authoritarian than anywhere else, but also promote inflation in a seriously negative way,” the “Mad Money” host said.

As examples, he pointed to rules that deal with hours of service for truck drivers at a time when driver shortages are commonplace, as well as policies for hog slaughtering and their impact on the supply of meat products, such as bacon.

“In many cases, this stuff is the cost of a safer, better, freer society, and I think it’s worth the price. But make no mistake, the price is real, and it’s going to get worse before it gets better,” Cramer said.

With inflation in the U.S. running at its hottest pace in decades, the Federal Reserve is widely expected to raise its benchmark interest rate in March. That’s the central bank’s primary tool to combat inflation and deliver price stability, one half of its mandate along with full employment.

Cramer said he does believe there will be some natural improvement in the inflationary pressures. He cited as an example recent comments made by the CEO of Colgate, Noel Wallace, who said on the company’s earnings call last week that he expects raw material costs to peak in the first quarter.

“So many companies saw such large raw-cost increases last quarter that now they have no choice but to pass these costs on to their customers by raising prices now ... and those price hikes are hitting you now,” Cramer said.

“When you go to any store or restaurant in the next two months, you’re going to see substantially higher prices,” he predicted.

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