Jim Cramer On Financials: 'This Is Day One Of The Rally'

Financial stocks were trading mostly higher on Wednesday with the Financial Select Sector SPDR Fund (NYSE: XLF) outperforming the broader indices.

According to CNBC's Jim Cramer, investors are banking on the likelihood that the Federal Reserve will hike interest rates at least twice throughout the rest of the year, if not three times.

Speaking during Wednesday's segment of "Squawk On The Street," Cramer noted that the justifications behind a rate hike are evident to market participants — lending is "really picking up in the country" which naturally results in a bullish sentiment among bank stocks.

Related Link: How Do Financials Typically Trade Ahead Of Fed Rate Hikes?

Specifically, shares of Bank of America Corp (NYSE: BAC), Citigroup Inc (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co (NYSE: WFC) are all benefiting from the sentiment.

"I think this is another stealth rally that no one is talking about," he said. "People want to get out of these stocks. You gotta stay in because this is day one of the rally."

Cramer added that the story behind owning bank stocks now is about "the rate hikes and how much money they can make on rate hikes."

Bottom line, Cramer suggested that the financial sector can "lead better than any group in the market" other than transports.

"It's more bullish than even tech," he concluded.