CNBC’s Jim Cramer stated that Wednesday’s rally will likely reverse course as quickly as a Federal Reserve main advises Wall Street of its hawkish position versus inflation.
“The moment some Fed-head explains the obvious, today’s gains will indeed disappear because they’re incompatible with the Fed’s attempts to control inflation. This rally was based on a dream,” he stated.
Stocks increased on Wednesday as the Bank of England stated it will redeem bonds to support the currency market, a day after the S&P 500 notched a brand-new bearish market low.
The two-year Treasury likewise fell from around a 4.3% yield to 4.1% in what Cramer called a “stunning” turnaround.
“It was like the entire bear market transformed into a bull market because another country’s central bank — not our central bank — gave up on fighting inflation,” he stated.
And while the Bank of England appears to have at least momentarily deserted its efforts to tighten up the economy, Cramer alerted that the Fed is not likely to do the exact same, particularly given that it desires rates and individuals’s costs power to come down.
“In the next two days, we’re going to hear, likely, from a bunch of Fed officials who’ll deny that they’re going to blink and insist they have the fortitude to fight inflation,” he stated.