IGI Logo

Perspective on FED Data by Mr Mohit Ralhan, CEO, TIW Capital

The 50-bps rate hike by the US Fed was along the expected lines. The inflation in the US has trended down but it is still significantly above the 2% target threshold and Fed has given enough indication that it will take the policy rates to 5%. Although the gasoline and electricity prices declined a bit in November and food inflation moderated, the housing rents still remain high. It is likely that Fed will continue to increase the rate to at least 5% or slightly above 5% before pausing and then wait for inflation to reverse to below 2%. Only then it is likely to start unravelling the rate hikes. 2024 is expected to be the year of high-interest rates and the central banks across the major economies are also likely to continue rate hikes to keep the rate differential with the US in check irrespective of their domestic inflation situation.

Above views are of the author and not of the website kindly read disclaimer