No case for more jumbo rate cuts by the Fed, strategists say

There is no case for more 50-basis-point rate cuts by the Federal Reserve, veteran market strategists told CNBC, saying the latest U.S. jobs data implies the central bank might have acted in haste.

David Roche, founder and strategist at Quantum Strategy, described the Fed's decision last month to lower its key overnight borrowing rate by a half percentage point as a kneejerk move.

Nonfarm payrolls data out last Friday showed employers added 254,000 jobs in September, well beyond economists' expected 150,000. The unemployment rate, meanwhile, fell to 4.1%, down 0.1 percentage point.

Roche said the figures made the Fed's "jumbo interest rate cut look silly, populist and panicky."  

"The fault is being overly data dependent and without a strategic view," he said in emailed comments Friday, noting that, as a consequence, there should be "no more Jumbo cuts ... unless something real bad happens," such as the Middle East conflict escalating to the point where Israel bombs Iranian nuclear testing sites. 

Speaking to CNBC Monday, Roche said the Fed's move could prove harmful as it gives a false impression of the U.S. economy.

"No. 1 is that [it gives the impression that] the economy is more fragile than it is ... and the economy is fine, thank you very much, and doesn't need jumbo rate cuts," he told CNBC's "Squawk Box Europe."

"The second thing it does is to give you the impression that the Fed will cut rates successively to a level which is much lower than it actually will achieve. Fed rates will not go below 4% or 3.5%, and the reason for that is the economy is so robust that firms earn enough money without needing a lower interest rate."

By "cutting hard in the beginning," Roche said, the central bank created the impression that