Gary Schlossberg, global strategist at Wells Fargo Investment Institute, on Thursday, said that the Fed’s move was by and large on expected lines.

Share Market Live

NSE

The Federal Reserve, on September 22, hinted at an impending taper of bond purchases but refrained from giving an exact timeline for the same, stating that moderation in asset purchases would soon be warranted.

“All three assets (dollar, treasury yields, equities), the moves were fairly muted. The markets had anticipated a move like this. The Federal Reserve may have been a bit hawkish on their dot plots for interest rates, but as far as the tapering goes, pretty much as expected and that’s why the reaction overall was fairly muted,” Schlossberg said, in an interview to CNBC-TV18.

Also Read: Fed signals bond-buying taper coming 'soon,' rate hike next year

According to him, Evergrande could become a global issue. “It is going to be China-specific, although clearly, it could become more systemic than that. A lot of household wealth is tied up in the property. It has a ripple effect. So, it has to be handled right. And that's why the market is looking for the Chinese government to come in, the central bank to come in with some easing and we are beginning to see that. They certainly can contain the damage. If there is a policy error though, it could have more of a ripple effect on the market,” said Schlossberg.

On India, he said, “Emerging markets generally and perhaps India in particular, will be affected by a shift in monetary policy by the Federal Reserve. So, we certainly have to be mindful of that.”

Also Read: Fed policymakers see upward march in interest rates starting next year

“The fact is that the Indian market is surely benefiting from Federal Reserve’s accommodation, but India is coming off a very strong rebound in economic growth and there are some fundamentals behind that, but it will be tested as the Federal Reserve slowly shifts gears, they and other emerging markets will be tested in the coming months, but we think they will persevere against the backdrop of an improving global economy,” Schlossberg said.

For the entire interview, watch the video

(Edited by : Dipika Ghosh)