The next phase

Global financial conditions would tighten further

Higher than expected softening in the inflation rate had raised expectations among market participants in the US that the Federal Reserve (Fed) would soon end the rate-increasing cycle. The inflation rate in the US eased to 7.1 per cent in November as against 7.7 per cent in October. However, the markets would have to adjust expectations. While the Fed delivered the federal funds rate hike of 50 basis points on Wednesday, which was lower than the previous hikes of 75 basis points, and was on expected lines, its Chairman Jerome Powell made it clear in his post-policy press interaction that