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Jim Cramer's Stop Trading! May Flowers

TheStreet.com Staff

A rally in the banks shows that the Fed will ease rates in May, Jim Cramer said Wednesday on CNBC's Stop Trading! segment.

Cramer said the Fed's statement that it is keeping an eye on what it euphemistically called a housing adjustment "shows they're real worried" about the effects of the squeeze on subprime lending, Cramer said. He called the Fed statement "the most dovish statement" in some time.

Cramer noted that the BKX, the bank index, rose "parabolically" because bank investors are taking the statement as an indication that "we're out of the woods" on subprime. He said lower rates will allow the big banks to take share from "the clown companies" that didn't have the capital to compete and brought lending standards down too far.