Mad Money host Jim Cramer now expects the U.S. Federal Reserve to lift rates by 25 basis points tops in its meeting next week.
Here’s what it means for the stock market
That paints a rather rosy picture for the S&P 500 which added another 2.0% on Thursday.
Remember that the Fed Chair Jerome Powell had spurred fears of a 50-bps hike as he testified on Capitol Hill last week. But now that the Silicon Valley Bank has failed, Cramer noted, a bigger increase in interest rates is out of question.
We thought Powell was going to hit us with a 50 basis points hike because inflation refused to be beaten. Now we know he doesn’t need to do anything to beat inflation – those bank runs will do it for him.
The benchmark index is still down about 5.0% versus its year-to-date high.
What other banks have been affected?
What’s also noteworthy is that the regulators have now closed Signature Bank as well. On Mad Money today, Cramer said:
Sure, the bulls didn’t get it the way they wanted it, with a soft landing and a gradual reduction in oil prices, but they got what they needed, with the stunning flameout of first national bank of wretched excess and a few banks more.
Credit Suisse had also flagged liquidity issues in recent days but has now secured a lifeline as Invezz reported HERE.
Also on Thursday, a consortium of big banks injected $30 billion into First Republic Bank to calm fears that it might go under as well.
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