CNBC host Jim Cramer said that when Federal Reserve Chair Jerome Powell announced a 25 basis point hike on the Fed funds rate March 22, he wasn't concerned.
But he became concerned after that was followed by Treasury Secretary Janet Yellen's comments to the Senate Appropriations Committee.
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Cramer said Yellen's comments were "tone-deaf," and that the market "would've been fine" if Yellen hadn't said the government would not offer help to shareholders, bondholders or depositers in the failed banks, according to CNBC.
The Dow Jones Industrial Average ended the trading day Wednesday down 532 points at 32,021.38 on March 22.
The interest rate increase was "logical, reasonable and something anyone with a savings account should actually cheer," Cramer said.
Many investors had hoped for a government bail out of depositors at the failed banks, Cramer said.
"Yellen’s remarks to the contrary sent waves of fear through the market," Cramer said.
He added that investors thought the markets were steadying before Yellen's remarks.
"We believed things were stabilizing," Cramer said. "But now, thanks to the congressional hectoring of Janet Yellen and the endless replay of questions to Powell about the fragility of the banking system, we came out of the session worried."
During her testimony, Yellen was asked whether Treasury officials were looking at ways to expand FDIC coverage to all deposits.
"This not something we have looked at. It’s not something that we’re considering," she said.
"Going forward, we expect the Fed’s data dependent framework to be informed by what happens in both the economy and banking sector," wrote Ashish Shah, chief investment officer of Goldman Sachs’ Public Investing Business, according to Barron's.
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