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Below is Perspective on The Fed Policy Statement By Mr Anand Varadarajan, Director, Asit C. Mehta Financial Services Ltd.

The equity markets are likely to see increased volatility in the next few months as the Federal Reserve raised interest rates by another 0.75% again on Wednesday to combat rising inflation.  The decision lifts the target for the benchmark federal funds rate to a range of 3.75% to 4%, its highest level since 2008.

The Fed said its battle against inflation will require borrowing costs to rise further, pointing to fact that it may be nearing an inflection point in what has become the swiftest tightening of U.S. monetary policy in 40 years.

The double-sided message keeps open the possibility the Fed may raise rates in smaller increments in the future, ending its sequence of three-quarters-of-a-percentage-point hikes as soon as December in favor of more tempered increases of perhaps half a percentage point, while also leaving policymakers room to continue pushing rates higher if inflation doesn't start to come down”

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