What awaits Dalal Street next week? Frustration and Déjà vu!
SECTIONS
Share
Synopsis
While indices may have logged gains over the past three weeks, they have been stuck in an 800-point range between 14,200 and 15,000 for well over two months as investors balance the near-term disruption caused by the second wave.
Getty Images
If the domestic problems weren’t weighing investors down enough, this week also resurfaced concerns over the possible future actions of the US Federal Reserve.
Related
MUMBAI: Benchmark equity indices ended a lackluster week in the red, snapping a three-week long winning streak, as the Covid-19 pandemic continued to sap investors’ enthusiasm for stocks.
Markets are losing faith in the Federal Reserve s credibility
Bond vigilantes may stop believing the US central bank s assurances that inflation is under control and take matters into their own hands
13 May 2021 • 5:05pm
The US is engaged in an astonishing monetary experiment. The Federal Reserve is still conducting quantitative easing even as the rate of headline inflation hit 4.2pc.
Core inflation has risen to a 25-year high of 3pc, recording the biggest jump in a single month since 1981. Factory gate inflation has been running at a 7.1pc annual growth rate over the last six months even before full reopening.
The Biden administration is running a budget deficit of 13pc of GDP this year even though the output gap closed in April and large parts of the economy are overheating. Small firms cannot find workers. Unfilled job openings have reached a record high.
Mexico's central bank on Thursday kept its key interest rate steady, as expected, in a unanimous decision by its five-member board that reflected growing concerns about the path of inflation and expectations the next move would likely be a hike.