Fund managers welcome Fed stance, expect RBI to cut rates

Domestic fund houses are of the view that the US Fed's status quo stance on rates is a positive indication for RBI to lower its lending rates.
RBI, which has already reduced its key policy rate by 75 basis points so far in the current calendar year, will be reviewing its annual monetary policy on September 29.
"The US Fed's decision to delay raising rates is positive for interest rate here which we are expecting to come down. Our equities continue to be good long-term investments despite emerging market redemptions," ICICI Prudential MF Managing Director and Chief Executive Nimesh Shah said today.

The central bank of the world's largest economy kept interest rates (which are at near zero) unchanged last night citing worries about the global economy, financial market volatility and sluggish inflation at home, but left open the possibility of a modest policy tightening later this year.
"The ultimate beneficiary of US Fed decision to not hike rates - risk assets - don't seem to have embraced the Fed's decision and we are noting mixed signals across emerging markets. The Fed confusion is probably too much for the market to take and this has only induced more future uncertainty," Tata AMC chief Investment Officer Ritesh Jain said.

"We would want to wait and see how gold and the dollar index behave in the next 2-3 days to get more clarity on the future course," he said.
"The language of the Fed has moved to a more accommodative stance given global uncertainty. The long-term expectation of unemployment rate in the US is around 5.1 per cent, at which level the US economy is deemed to have achieved full employment," Quantum AMC Head-Fixed Income Murthy Nagarajan said.