The Russia-Ukraine war has led to a rise in the prices of crude oil and other commodities. Supply chain problems have arisen around the world, due to which the risk of rising global inflation has increased. Meanwhile, the policy meet of the US Fed and Bank of Japan is going to be held next week. It is certain that the US Fed will hike interest rates, but market experts expect the Bank of Japan to continue easing its monetary policies.
Inflation on the sky due to Russia-Ukraine war
Inflation in the US has reached a 40-year peak. In February, retail inflation has seen a year-on-year increase of 7.9 percent, which is the biggest annual growth in the last 40 years. For the first time since 1982, the US has seen such a large increase in inflation on an annual basis.
The recent sanctions imposed by the US President on Russian oil imports could lead to further increase in US energy prices. Let us tell you that Russia is one of the largest crude oil and gas exporters in the world.
What the market expects before the FOMC meet
Market analyst expects that the US Fed’s meeting to be held on March 16 will start the period of increasing interest rates. Experts believe that this year we may see interest rates increasing 7 times. Experts also predict that in the policy meet to be held next week, the US Fed may increase interest rates by 25 basis points, or 0.25 percent.
The outbreak of the Ukraine-Russia war is the biggest fear for the market
Eminent market expert Steve Englander in an interview to CNBC TV-18 Said that inflation is a big concern for the market. He also said that inflation has now reached a level from where it is not likely to increase further. The US Dollar has been the safest and most stable performer throughout this rally. The biggest fear for the market is that the fight between Ukraine and Russia is getting more serious and with this there is a fear of this fight spreading beyond the borders of these two countries. If this happens then it will be very unfortunate for the market.
Similarly, another economist Taimur Baig told CNBC TV-18 In a conversation with India, it has been said that India is also not safe from the pressure of rising inflation around the world. However, India is in a comparatively better position to deal with this inflation. The Reserve Bank of India currently has more inventory to deal with the currency situation than in 2013.
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Rising crude oil prices can decide the direction and condition of the market in the near term
Shrikant Chauhan of Kotak Securities It says that the rise in energy prices and its impact on the macroeconomic parameters of the country will play an important role in deciding the condition and direction of the market in the near term. He further said that in the midst of persistently high level of inflation, the market will be watching the announcements of the US Fed meetings to be held next week.
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