Jerome Powell speech unlikely to stir India markets, deter foreign inflows

On the contrary, flows into India may surge if the Covid situation remains in control, say experts

The latest soundbites on taper by US Federal Reserve Chair Jerome Powell would unlikely stir the Indian markets or affect portfolio flows a lot, as fears of a more hawkish tone gave way to the reassurance of continuity, albeit with nuances.

Market participants were not expecting a hasty withdrawal from the Fed’s accommodative policies but the annual speech of the Fed chief was still being monitored for any hint of premature tightening.

This is because the end-June Federal reserve minutes had raised concerns about an earlier withdrawal of accommodation by the US Fed. As the job market improved and inflation overshot the