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Quote On Morning Market 23 March 2023 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The 25 bp rate hike by the Fed and dovish commentary were on expected lines. The Fed is trying its best to balance inflation control with financial stability. The strong message from Jerome Powell that “the US banking system is sound, resilient and well capitalised with adequate liquidity” should calm the markets. But the late day sell-off was triggered by the Treasury Secretary Janet Yellen’s comment that they are not considering blanket deposit insurance. This kind of gyrations happen in a highly volatile whipsawing market driven by daily doses of news. The Fed has signalled perhaps one more rate hike this year and then a pause. Investors need to expect only moderate returns from the market in the present context of high interest rates. Investment in fixed income and systematic investment in high quality stocks for the long-term is the ideal investment strategy now.

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