US Fed outcome expected today: How will the decision impact Indian stock market?
US Fed policy outcome: 6 key things that will be in the Fed's mind before making a rate decision today (Exciting news! Mint is now on WhatsApp Channels. Subscribe today and stay updated with the latest financial insights! Click here!) Barring a few, experts do not expect the Fed to surprise the market by raising or cutting rates as the US economy remains strong and inflation remains above the Fed's 2 per cent target.
The gross domestic product (GDP) of the US expanded at an annualised rate of 4.9 per cent in the September quarter, the US Bureau of Economic Analysis (BEA) first estimate showed on Thursday, October 6. Meanwhile, the US labour costs increased significantly in the September quarter amid strong wage growth.
According to a Reuters report, quoting the Labor Department's Bureau of Labor Statistics data, the Employment Cost Index (ECI), the broadest measure of labour costs, rose 1.1 per cent last quarter after increasing 1 per cent in the April-June period. On the front of inflation, the personal consumption expenditures price index rose 3.4 per cent in September and the core PCE price index rose 3.7 per cent, according to a Reuters report.
Resilient economic growth is a factor which can give the Fed comfort in keeping interest rates high for some time. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services also believes the US Fed is most likely to hold rates in this meeting but the message from the Fed chief Powell will be hawkish since the economy is surprisingly resilient with a 4.9 per cent growth in Q3 GDP.
The high bond yields in the US also indicate that the market expects the higher for longer rate regime to continue for some time, said Vijayakumar. Deepak Jasani, Head of Retail
. Read more on livemint.com
