Market veteran Adrian Mowat believes that the global markets are more concerned about a hawkish Fed than the Omicron variant of the COVID-19 virus.

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In an interview with CNBC-TV18, he said the emerging equity market strategist said that the recent comments by Fed Chair Jerome Powell are the main reason for the current correction seen in the market.

The concerns in the market are regarding Powell's statement which saw the dropping of the word 'transitory' with respect to inflation.

“The market is becoming more concerned about a hawkish Fed - one in which the Fed starts to lower growth and that's why longer-term rates haven't been moving up in the way that the shorter-term rates are moving up. So to me, it's very much about the Fed,” he said.

In a fresh sign of his growing concerns about inflation, Chair Jerome Powell said Wednesday said that the Federal Reserve can't be sure that price increases will slow in the second half of next year as many economists expect.

In a recent interview with CNBC-TV18, former RBI governor Raghuram Rajan had echoed similar views.

On COVID concerns Mowat expressed confidence in the stricter measures being placed to tackle the Omicron variant.

“We have had some prudent measures put in place in terms of reducing travel, which hopefully is a short-term thing,” he said.

A release by Apple has shown that their i-phone sales have dipped with the festive season approaching. Mowat expressed his concern regarding the US tech stocks.

“Very large weighting in the US market is tech enabled industries - your Apples, your Facebooks or Amazon, Tesla, etc. And those expensive growth stocks like to have low discount rates. So the threat to those is if inflation is more persistent, and rates move higher, then you get a P/E multiple compression,” he said.

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(Edited by : Abhishek Jha)