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AUDIO-Sowanick: equity rally casts doubt on Fed decision
Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey, said he interpreted recent remarks by top Federal Reserve officials to mean the central bank had elevated the importance of the equities market in its decision-making during the current period of “crisis management” since the major credit crunch that hit in August.
Sowanick, who was speaking Monday at the Reuters Investment Outlook 2008 Summit in New York, also said the equity market will pay more attention to what the Fed says in its statement on Tuesday, rather than what it does on interest rates.
“If they say things are deteriorating further and they cut 50 basis points, I think the equity market would fall, led by financials, and the Treasury market would become even giddier.”