Fed Cut Talk 'Premature,' Portfolio Manager Says

Russ Koesterich, senior portfolio manager at Barclays Global Investors, told CNBC’s “Closing Bell” that talk of a Fed rate cut is premature.

“I think a Fed cut is still out of reach,” Koesterich said Friday. “The Fed was clear in its language the other day –- inflation is still a concern. We need to see a couple of things in the back half of the year to get a cut: Labor costs have to continue to come down, and we have to see a little easing up on capacity utilization. There are still some pressures on the manufacturing side that I think make talks of a Fed cut premature.”

He said liquidity is the key to the continuing bull market. He likes the technology sector and said large-cap European stocks are good buys at about 13 times earnings.

The Labor Department reported that wholesale prices rose 0.7% in April, down from a 1% increase in March. Gasoline prices jumped 8.2%, following increases of 8.7% and 5.3% in the previous two months.

Outside food and energy, prices were unchanged last month, the second straight month the core inflation index was flat.