The global economy is currently facing some turbulent macro undercurrents along with rising geopolitical issues stemming from Russia-Ukraine tensions. With a view to make sense of the mounting pressure that is building up on global indices, CNBC-TV18’s Latha Venkatesh spoke to Steven Englander, Global Head-G10 Fx Research and North America Macro Strategy, Standard Chartered.

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Englander believes that there’s much more room for the dollar to appreciate. According to him, the global markets have been pricing in more hikes by the US Fed. On the upcoming rate hikes, he doesn’t think that the Federal Reserve wants to be particularly aggressive. He believes the Fed will hike rates 4 times, pause and then likely reassess in 2023.

He said, “In March, May, June and July meeting – over that period of time we are a bit behind the market in terms of our hiking expectations but the further we go into the year, the more on the dovish side we are. We think the Fed is cautious about growth."

On inflation, he said that it could hit a peak in Q1. He also cautioned that inflation in India could be higher. He believes the Reserve Bank of India (RBI) will narrow repo and reverse repo rates in the next 1-2 meetings.

"We still think that inflation is going to come up; we expect inflation to hit a peak in Q1 and that’s still our forecast,” he said.

Also Read: Will focus more on growth normalisation than inflation risks: Standard Chartered’s Abhilash Narayan

“My colleagues in India think that there is a decent chance that inflation number will be a bit higher; we have to back away from the ultra dovishness as expressed. We do think it will be a while before they raise the policy rate but the narrowing between the repo and reverse repo rate, we think that will happen either at the next meeting or the meeting after,” said Englander.

For the entire interview, watch the accompanying video

First Published:Feb 14, 2022 3:27 PM IST