Fed hike is good for the US markets; FII outflow from India can accelerate

The rate hike is a slight negative for markets, but not as negative if the uncertainty (trade war) had continued, says UR Bhat

On the positive side, the Federal Reserve seems to think that the US economy is headed for better times. It feels that the growth is very robust and expects unemployment to fall even further. At the same time, inflation is also on the upward trajectory. Therefore, Fed believes it is important to increase interest rates, which it has done. And, it is now talking about two more interest rate hikes, which is probably a bit more than what the market expected. 

The markets were expecting a total of three hikes in a year, but now there will be four. Even now,