- 03 Nov 2022
- ICICIdirect Research
US FED HIKES RATE BY 75 BPS FOR FOURTH CONSECUTIVE TIME
News:
The US Federal Reserve raised its interest rate by 75 bps for a fourth consecutive time taking it to the range of 3.75-4.0%. The Fed signalled plans to keep raising interest rates to combat inflation possibly in smaller increments but to higher levels than previously anticipated. Fed Chair Powell said “even if policymakers do scale back future increase, they were still undecided about just how high rates would need to rise to curb inflation, and were determined to stay the course until the jobs done.” After the conference dollar and yields regained some strength. US two year yield move back to 4.6% and DXY near 112 levels
View:
The rupee is expected to depreciate in comings days falling beyond 83.50 as dollar is regaining back its strength and trying to move back to 114 levels. Dollar is rising as the US Fed raised its interest rates by 75 bps and dashed the hopes that interest rate hike will end soon. Fed Chair Powell hinted the magnitude of hikes may be smaller but the bank is far away from ending its tightening cycle
Impact:
Negative