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Fed keeps rates unchanged; experts discuss implications, tapering timeline

In an interview with CNBC-TV18, Arvind Sanger, managing partner of Geosphere Capital Management, and Steve Brice, chief investment strategist of group wealth management at Standard Chartered Bank, discussed at length about rates, taper talks and the global picture.

The US Federal Reserve on Wednesday, July 28, held its benchmark interest rates near zero and also said that the economy continues to strengthen despite concerns over the pandemic. Chairman Jerome Powell reiterated that the Fed is nowhere near considering a rate hike.
In an interview with CNBC-TV18, Arvind Sanger, managing partner of Geosphere Capital Management, and Steve Brice, chief investment strategist of group wealth management at Standard Chartered Bank, discussed at length about rates, taper talks and the global picture.
First up, Sanger said, “Tapering, which is the most immediate focus, doesn't seem to be on the cards till end of the year at the earliest and maybe January, but any discussion about tapering has begun, but if there are any meetings before any tapering happens, the next meeting in September is off the table. Therefore, the tapering will take place late in 2021 or early 2022, which means a rate hike is also a late 2022 event.”
Meanwhile, Brice said, “The Fed outlook is quite positive and our view there is that we are not going to see anything big enough before December nor tapering taking place in Q1. I think they are going to be waiting for employment data from September, which means early October, before making any decision.”
Brice further said that regulatory clampdown in China has raised concerns and therefore he is not convinced that it is over yet.
According to him, the dollar index breaking through 89 would be positive for emerging markets. “However, at the moment we prefer Europe because there are reopening but within emerging markets India is preferred,” said Brice.
For the entire discussion, watch the video