homeeconomy NewsUS Fed may hike rates twice in quick succession; expect India's FY23 inflation at 6.3%: Nomura
US Fed may hike rates twice in quick succession; expect India's FY23 inflation at 6.3%: Nomura
In an interview with CNBC-TV18, Rob Subbaraman, Head - Global Macro Research, Nomura, said that their average inflation forecast for India stands at 6.3 percent in FY23. He also expects two consecutive interest rate hikes from the Federal Reserve in May and June.
Federal Reserve Chairman Jerome Powells’s recent talks have turned hawkish amid rising pressures to curb inflation. Markets are now pencilling in the possibility of a 50-basis points interest rate hike in May itself.
To understand what the fallout can be for India as crude oil prices continue to rise owing to the ongoing war, CNBC-TV18 caught up with Rob Subbaraman, Head - Global Macro Research, Nomura.
Subbaraman mentioned that he expects two consecutive rate hikes in May and June from the Fed. However, he voiced his concern, adding that the Fed is not much experienced in quantitative tightening. He remains confident that the Fed will unwind its balance sheet in a way that it does not disrupt the market.
Also Read: Indian economy better placed to deal with any challenge, says RBI governor Shaktikanta Das
Subbaraman stressed that it is a tricky environment for economies of emerging markets. He pegged India’s average inflation forecast at 6.3 percent in FY23.
He said, “It’s a very tricky environment for emerging market economies that are large net commodity importers because the commodity price rise, in particular, is very challenging; it’s going to be bad for some economic variable for net large oil or food importers.”
Watch the video for the full interview.
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