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Perspective on US Fed Statement By Mr. Gaurang Somaiya, Forex & Bullion Analyst Motilal Oswal Financial Services

“Fed Chairman at the Jackson Hole symposium  mentioned that higher inflation is likely to bring some pain to household and businesses. He added that US economy would continue to show strong underlying momentum and also pledged that the central bank will “use our tools forcefully” to attack inflation. On interest rates the Fed will be dependent on the incoming economic data. Inflation continues to be the major concern for the Fed but in the process it could slower growth going ahead. US equities fell sharply  while US dollar and 10 year yields rose in expectation of further tightening announcement by the Fed. Overall commentary is hawkish but Fed will be data dependent. Dollar will continue to get support at lower levels.”

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