InvestorQ : How do you expect the markets to react to the Fed decision to hike rates by 2023? Any sector preferences or stock preferences?
diksha shah made post

How do you expect the markets to react to the Fed decision to hike rates by 2023? Any sector preferences or stock preferences?

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Arti Chavan answered.
6 months ago
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The Fed has hinted at two possible rate hikes by end of 2023 so that is around 0.50% in the next 2.5 years, if everything goes fine. That is a long shot and while the markets may react negatively in the short run, I think the medium term impact will obviously be positive. That is because it is clear indication that the growth is coming back to the economy and the higher inflation is purely an outcome of supply chain constraints.

In terms of stock or sector strategy, IT could be a good bet as the sector is most likely to benefit from the US growth engine. As the US bets big on infrastructure, metals and capital goods could still be big stories. Rate sensitives could be under some pressure and investors need to be wary where valuations are high. Traders can use dips to accumulate rather than jumping to buy the momentum.

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