Many developed economies have struggled with high inflation for a decade which has begun to reflect on weak consumer demand. Central banks appear to have no choice but to tighten monetary policies further, fueling growth concerns and plunging financial markets into a tailspin.
There are fears of a recession in the US, especially as the US Fed now finds it difficult for it to secure a “soft landing”. Investors don’t know how much growth policy makers are willing to sacrifice to control inflation. The process could be painful.
ETMarkets caught up with Radhika Rao, Senior Economist at DBS Bank to gain a close understanding of these global developments. Rao spoke about the weak Rupee, foreign capital outflows and also commodity prices, which have started to decline a bit amid global demand concerns.
Hello Radhika, welcome.
Q. With the Rupee falling to new lows with each passing day, where do you see it heading by the end of the year?
Q. With the US economy sending mixed signals, do you see the possibility of a soft landing rather than a hard landing? What impact will this have on financial markets?
Q. What is the terminal rate you see for the Fed rate? Do you think US rate hikes may not be aggressive — after say July, but steady?
Q. Commodity prices have seen some deceleration, whether metals or crude due to fears of slowing growth. Do you think such weakness is temporary, as last week China announced the easing of Covid restrictions and there is no end to the crude supply issues?
Q. Where do you see the dollar index moving? Do you think India’s persistent foreign equity outflows will continue through the rest of this calendar?
Thanks for these ideas.
That’s all in this week’s special podcast. Keep checking this space for more interesting content and take the time to follow our market podcasts every day. Stay safe and have a nice weekend!
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts belong to them. These do not represent the views of Economic Times)