Banks

Bank of England action means we're in quantitative easing infinity, expert says

Pedestrians walk past the Bank of England in the City of London, Britain June 28, 2016.
Paul Hackett | Getty Images

The world is in quantitative easing infinity now, after the Bank of England cut interest rates for the first time in over seven years.

While many economists had predicted that the U.K.'s central bank would lower rates, the actions the BOE announced Thursday were slightly more aggressive than expected.

"I think we're in QE infinity now and now they're coming up with new ways of making QE because they can't cut rates anymore than they already have," Steven Dudash, president of IHT Wealth Management, said on CNBC's "Power Lunch." He added, however, that he doesn't "see how that helps banks."   

"It's hard to see how that's going to help the bank world and I'd probably be avoiding them right now at least for the foreseeable future," Dudash said.

But Robert Pavlik, chief market strategist at Boston Private Wealth, said banks could potentially benefit from this economic backdrop because they're involved in trading bonds and issuing new bonds for corporations. He explained that the financial sector reaps an investment banking fee from these kinds of activities.

"I am at least somewhat more favorable on the banks because I think with this cut in interest rates and the additional bond purchases by the Bank of England, it's going to help some of these international banks like JPMorgan, like Citigroup and so I think there is some favorable impact," Pavlik said.

Pavlik said he is interested in financial stocks like Bank of America, JPMorgan Chase, Citigroup and BlackRock. "Lower interest rates means positive things for these companies going forward," he said.