His comments come after the Fed raised its benchmark interest rate by 75 basis points on Wednesday, marking the biggest jump since 1994.
While stocks rose on the heels of Powell's announcement, the bank stocks' gains were modest. The major indices reversed Wednesday's gains and then some on Thursday. Cramer said the bank stocks should have rallied more than they did on the day of the Fed's announcement, as a higher-interest environment is often good news for banks.
"Every time the Fed tightens, it means the banks can take your deposits and then instantly earn higher risk-free returns by putting them in short-term Treasurys," he said. "Of course, a Fed-mandated slowdown will also hurt the banks — more defaults, less demand for loans — but I think any potential weakness will be much more than offset by these much higher net interest margins,"Sign up now
Cramer. You sold the people out
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European Central Bank Announces Emergency Meeting to Discuss Market RoutThe European Central Bank announced an unscheduled monetary policy meeting for Wednesday, at a time when bond yields are surging for many governments across the euro zone.
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