Central bank raises interest rates for the first time since 2018  

Jerome Powell . Chair of central bank of USA

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Equity market is the money, each step taken on wall street is to make a profit. The USA recorded the highest inflation hike at 8.5 per cent. Highest recorded in last 4 decades. The inflation rate is not necessarily bad.it depends on a balance between inflation and a rise in income. if the income is rising shoulder to shoulder with inflation or even higher than the inflation is good for The economy and vice-versa. As we commonly know inflation means a rise in goods prices or services etc. It is important to have a general understanding of inflation. The factor that is causing inflation. . The consumer price index increased by  1.2% YOY taking the inflation rate to the highest levels from a year earlier following a 7.9% annual gain in February. This is the level of inflation highest levels from a year earlier following a 7.9% annual gain in February. Labor Department Made public on Tuesday. This inflation gauge is the biggest gain since 2005  according  to the Latest  numbers from the White House Revealed on Tuesday.

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Inflation is just the decline in the purchasing power of an individual or to be technical inflation is a rise in the consumer price index. What needs to be looked at is how inflation causes a decline in one’s purchasing power but  most  often it results in worsening financial conditions . For example , Say there is a  house listed at 100 dollars but if the inflation rate is at over 15 per cent now the house will cost the individual 115 dollars To purchase the same house provided the individual buys that house when the Housing market inflation is at per cent 15 per cent but the individual income rose by 18 per cent .It indicates that buying power increased and vice Versa (if the income hike rate is way below relative to the inflation rate hike its results in paying more for the same house or any product, services etc .The individual’s income remains the same but the value of his wealth or cash decreases.

OPINION

The whole market depends on demand and supply .supply and demand can be manipulated such as shorting etc. Which has it advantageous  even for Retail investors but with high risk. But the collateral damage is usually  paid by retail investors .We guide you you in investing, managing your portfolio. As managed portfolio by experts have been proven to increase in realised gains


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US central bank hikes interest rates by 25 basis points for the first time since 2018

Chair of bank America  Jerome Powell hiked inflation by 0.25 per cent (25 basis points) to control the skyrocketing inflation. YTD (Year to date) interest rate has been increased by .75%

HERE IS HOW IT WORKS. HOW CENTRAL BANKS DEAL WITH INFLATION

The central bank decides the inflation rate to maintain the balance between debt and income and to keep an eye on which way its tilting. They are supposed to make sure our economy keeps doing well 

Central Bank OF  USA or the Reserve Bank in India  apart from sole Government policies differences  but more or less  national banks work rather in a similar way

RBI is just one authority right ?i do not agree,Their policies effects from rich to the poorest .Think more of RBI as lender and banks as borrower. Reserve bank of India(RBI) lends money to bank and also facilitates overnight borrowing.Banks lend and borrow money from each other on regular basis overlooked by RBI

This chart illustrates the USA national debt vs GDP

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As inflation rate has been rising for at last two years. Indians companies that earn in dollars might be the one to benefit from inflation and subsequent increase in dollar value.

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