No country could remain in isolation after the global interdependence of trade has increased and a country like U.S.A that act as a supreme power whose actions and decision-making will definitely affect other countries.
Investors in Indian and global markets are awaiting for the U.S. Federal Open Market Committee to come up with decision on Interest rate that will guides for the liquidity either to increase or decrease in the economy.
What to expect
Looking at the factors that will shape the decision by Fed chair Jerome Powell either to come up with a hawkish or dovish tone or the stance should remain neutral.
We are expecting a neutral stance with a dovish tone from the Fed due to escalating Sino-US tariff war as the pile up of crude oil inventories reported from Energy Information Administration has signaled for an economic slowdown and a steep fall in U.S. Non- Farm payrolls are not painting a rosy picture for the current situation of the economy. The infusion of liquidity is required to curb the slippage in GDP numbers and Purchasing Managers Index. The numbers came for Core Retail Sales didn’t find any deviation although weaken numbers in this factor could have advocated for a rate cut this time. So the borrowing cost that Federal Reserve left previously at 2.50% is expected to remain same.