Prices are now projected to rise faster than expected at least in part and perhaps largely due to Trump's plans to levy duties on imports from U.S. trading partners, Fed Chair Powell said.

Lower rates can stimulate the economy, and Cramer said the data in the CPI report gives the Fed room to cut, which would benefit the market as a whole. The central bank may actually have to cut, he continued, because tariff increases could lead consumers to spend less, which in turn means many retailers will miss their estimates.

Fed holds rates steady, signals uncertainty over Trump tariffs. Inflation forecast rises, growth slows, but markets rally on hopes for 2025 rate cuts.