The US Federal Reserve's expected cut on interest rates today can only be a good thing for Bermuda and other global economies, according to a pair of top economists.

Peter Kotsopoulos, executive vice-president and senior portfolio manager for fixed income, and Bruce Murray, executive vice-president and managing director, who specialises in global equities, both from Canadian investment management firm McLean Budden, were on the Island this week visiting clients and gave a presentation to North Atlantic Asset Management investors at the Royal Bermuda Yacht Club yesterday.

Among the topics up for debate were the world economy, the catalysts of the economic turmoil and the solutions to the problem.

They reckon Bermuda will be impacted by the knock-on effect of the worldwide financial crisis, but not as badly as the US economy.

Investors and economists have predicted the Fed will slash its key rate by half a percentage point to one percent. Some think the Fed will opt for a smaller, quarter-point reduction to 1.25 percent today after Fed chairman Ben Bernanke and his colleagues opened a two-day meeting yesterday.

"We expect the Fed to cut rates and anything positive out of the Fed meeting that impacts the liquidity crisis that we are in will benefit all economies," said Mr. Kotsopoulos.

"We have had a crisis of confidence between financial institutions and you can gauge that by looking at inter-bank lending, Libor spreads are extremely high. But we see some easing of the high spreads, meaning it is getting better, but we are a long way off from fixing the problem.

"The idea is to take baby steps to slow the problem of the financial system and put it back on a firm footing.

"In respect to Bermuda, we think its economy will feel the effects with a lag from the US, so things may become a little bleaker in the near term, but by no means will it get to the severe levels of the US."

And Mr. Kotsopoulos believes billionaire investor Warren Buffett is right in telling people to buy stocks, but further down the line in the next three to six months.