5 Sep 2022

In his recent speech at Jackson Hole in Wyoming, Jerome Powell, the chair of the US Federal Reserve, made it clear that they would continue to raise interest rates till the inflation data turns favourable^.

“The Federal Open Market Committee's (FOMC) overarching focus right now is to bring inflation back down to our 2 percent goal. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy,” Powell said^.

The US central bank could raise interest rates by another 75 basis points in September, said Abhishek Bisen, Sr. Debt Fund Manager at Kotak Mahindra Mutual Fund, while discussing the outlook for September.

In India, one can expect the repo rate to rise to 6% “sooner than later”, he said. This could be followed by a long pause in rate hikes, he said.

The repo rate in India is currently at 5.40%.*

“As majority of the rate hikes get delivered, the anxiety of the markets will reduce, which will be very positive for markets,” Bisen said.

Investors can consider floating rate bonds in such a scenario, he said.

 


 

^Source: www.federalreserve.gov

*Source: www.rbi.org.in

This article is for information purposes only. The information provided herein is derived from public sources, believed to be from reliable sources. However, no representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. Views expressed herein involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied herein. Kotak Mahindra Mutual Fund/ Kotak AMC is not indicating or guaranteeing returns on any investments. Past performance may or may not be sustained in future. Readers should seek professional advice before making any investment-related decisions and alone shall be responsible for any decision taken.

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© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.