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Below is reaction to The Fed’s FOMC meet in September by Mr Mohit Ralhan, CEO at TIW Capital Group

“The rate increase of 0.75% by the Fed was on the expected lines. Fed has been communicating its resolve to continue increasing rates till the time inflation comes down to 2%. Jerome Powell’s speech yesterday was probably the strongest one in terms of demonstrating a commitment to controlling inflation. The inflation in the USA is still above 8% and there is a long way to go. It means that the rate hikes are likely to continue till it tops 4.5%. The dot plot of the Fed now doesn’t indicate rate cuts before 2024. As far as markets are concerned, the path of rate hikes looks more certain and the market participants who were hoping for an early reprieve on rate hikes, have been caught by surprise. As a result, S&P 500 declined by 1.7% yesterday. Near home, all eyes will be on RBI now and in all likelihood, RBI will need to follow through, to arrest the flight of capital and defend INR, even though the inflation in India is relatively under control. The markets are also pricing in the increasing threat of escalation by Russia as Putin appears to be doubling down including the option of using nuclear weapons. We are extremely cautious in the markets right now.”

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