On Wednesday, Jerome Powell (FED Chair) speaks about the hike in interest rates to curb red hot inflation. Furthermore, to curtail the inflation rate, officials showed concern about the hike in interest rates by 0.50 or 0.75 BPS.
High inflation may lead the US economy into recession. Powell states that there may be a higher possibility of an increase in future interest rates. Therefore, the rest all depends upon the pace of controlling inflation rates. Meeting by meeting, FED will evaluate the inflation and take precautionary necessary steps to reduce the rate.
Currently, the interest rate stood at 1.75 BPS and we are expecting an increase of 0.50 or 0.75 BPS in an upcoming July meet. Earlier, in the month of June, FED testifies the rate by 0.75 BPS which was quiet an aggressive step to tumble down red hot inflation.
Furthermore, policy makers are anticipating the biggest hike which may raise to 3.8 percent by the year ending 2023. In 15 years, this considers being the highest level.
Moving further, lets discuss some facts about the current scenario of the global market
We are anticipating, the officials to raise interest rates by 0.50 BPS because increasing by 0.75 BPS tends to be a way aggressive step to control inflation and may head US economy towards recession. Furthermore. a decline in crude oil and metal prices itself signifies that a primary step has already taken place to reduce inflation.
Furthermore, we are anticipating a positive consumer confidence data which will create pressure on FED officials. As a result, the trend will remain negative for both bullion and global market.
Equity market has already anticipated the 0.50 BPS and test its level. Therefore, we may experience Equity market in buying zone soon.
Nifty Technical Levels
Nifty is currently trading around 16117 levels. If Nifty50 sustains the level above 16000 on a closing basis, then we may witness upside targets of 16400—16650 levels.
Bank Nifty Technical Levels
Bank Nifty is currently trading around 34730 levels. If Bank Nifty breaches the level of 34300 then we may witness targets of 35300—35800 levels.
Bullion & Base metal Levels
Bullion and base metal may trade range bound whereas NASDAQ & Dow Jones has a major support of 11000 and Dow Jones has a major support of 31000. Moreover, we may expect a buying rally from downside panic.
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