- CNBC’s Jim Cramer said Wednesday that the market was distracted by Janet Yellen’s comments about bank failures instead of focusing on the stability reflected in the Fed’s rate hike.
- During the press conference of Fed Chairman Jerome Powell, Cramer said the market went haywire before falling in response to Yellen’s comments.
CNBC’s Jim Cramer said the Federal Reserve’s quarter-percent rate hike was not the reason the market tumbled Wednesday, but rather Treasury Secretary Janet Yellen’s “tone-deaf” words.
Cramer said the market “would have been fine” if Yellen hadn’t said the government wouldn’t bail out shareholders, bondholders or depositors of the banks that recently failed.
According to Cramer, many investors expect the government to bail out the affected depositors and shareholders of the bankrupt banks. Yellen’s opposing comments sent fear into the market. he said.
Cramer cut through the fear, explaining that the Fed’s moves today were not cause for concern.
The Fed’s rate hike was “logical, reasonable, and something anyone with a savings account should applaud,” Cramer said. Federal Reserve Chairman Jerome Powell even tempered his inflation concerns, as bank failures, for better or for worse, will help curb inflation, which Cramer says is good news.
But Cramer said the market struggled to see that reality because of the dark shadow of Yellen’s remarks and the continued comments during Powell’s press conference about banking vulnerability.
“We thought things were stabilizing. But now, thanks to the hectoring of Janet Yellen’s Congress and the endless repetition of questions to Powell about the vulnerability of the banking system, we came out of session worried,” said Cramer.
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