Posted at 2:36 p.m., Tuesday, January 22, 2008
Cadinha & Co. CIO comments on Fed rate cut
Advertiser Staff
The Federal Reserve may cut interest rates again by the end of the month as it seeks ways to stimulate the economy, according to Neil Rose, director and chief investment officer at Honolulu-based money manager Cadinha & Co.Rose made his remarks following the Federal Reserve's decision to cut its benchmark interest rate 0.75 percent earlier today.
"The Fed should announce another interest rate cut on January 30. However, despite the Fed's efforts to add liquidity, credit issues should take time
to be worked out," said Rose in a commentary that was e-mailed. "In the meantime, the election season and the prospect of higher tax rates in 2009 should be a liability for the equity markets."
"We remain significantly underweight equity exposure and recommend investors who are overexposed in equities use any market rally to lighten allocation."
"In addition, we continue to believe credit risk is a concern, and investors should trade any corporate, mortgage, and municipal bonds for risk free U.S. Treasuries."
