• CNBC’s Jim Cramer on Wednesday broke down the significance of the December consumer price index report for investors.
• "Unless inflation's coming down in all the right places, this earnings season could be very rough," he said.

CNBC's Jim Cramer on Wednesday broke down the significance of the December consumer price index report for investors.

"What makes tomorrow's consumer price index number a big deal? Simple: We're looking to see if we're nearing the end of the period where companies can raise prices with impunity," he said.

Cramer previously said that the Fed needs to crush companies' pricing power in order to beat inflation.

The December consumer price index report is set to release Thursday. The index shows how the prices of goods and services changed in a given month. Economists polled by Dow Jones expect the December CPI report to show that prices dipped 0.1% from the month before.

Stocks rose on Wednesday as investors grew more confident that the Federal Reserve's interest rate hikes are succeeding in tamping down inflation.

Cramer said that despite Wall Street's newfound optimism, it's possible the December CPI number could bring bad news for the economy — and for corporations set to report their quarterly results in the coming weeks.

"Unless inflation's coming down in all the right places, this earnings season could be very rough," he said.

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