Jim Cramer, the host of the American finance television program, Mad Money, commented on the impact of the “fistful” of bank failures on the Federal Reserve, forcing it to finish off the interest hikes.
Notably, in a YouTube video, Cramer referred to the recently shuttered financial institutions including the Signature Bank (NASDAQ:SBNY), Silvergate Capital (NYSE:SI), and Silicon Valley Bank (SVB), that shook the entire financial sector.
Significantly, the Federal Reserve has been raising interest rates with the intention to corral rampant inflation that has currently reached a 40-year high. In the coming week, investors were expecting a major move from the Fed to promote employment growth and consumer spending.
However, the three financial giants collapsed last week while the Fed interest rates skyrocketed upending the financial foundation of banks. Following the fall of the institutions, the Fed intervened in the situation to prevent public panic.
Accordingly, the Fed lend a supporting hand to “bolster the capacity of the banking system to safeguard deposits,” quoting:
Interestingly, Cramer commented that the Federal Reserve’s timely intervention was laudatory as the situation would have turned upside down without its support, leading the whole market to have a “blow-down” recession.
The television host added that it is possible to be optimistic about the stock market, adding:
In addition, Cramer posited that the Fed has been committed to keeping many regional banks in business, which drove it to support regional banks with favorable lending.
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Source: Cryptocurrency - investing.com
