Q:  How do you expect the market to react to Fed's stance?

A: We have seen a gradual reduction of the markets expectation of a rate cut by the Fed. Previously, they had been pricing in a fair amount of easing by the end of this year. But that’s mostly disappeared. So I think if anything, this move will probably tend to support that shift in those expectations and we will see probably even less expectation of rate cuts, going forward.

Q: There have been some talks over the last couple of days from global central bankers on the prospect of inflation becoming a little bit more of a dangerous beast in 2007. Do you see any early warning signs or are these people just being careful?

A: It’s difficult to see much in the way of warning signs. I think that the key point perhaps is that oil prices have bounced up a little bit but they are still well below the levels that we saw last year. Given that situation and given the general softness of commodity prices again compared to the peaks of last year, it’s difficult to get too worried about inflation at this stage.

Q: What do you expect to hear from the Indian Central Bank aside of any policy move? What do you think they will hold forward for the market over the next 3-6 months?

A: As I said, probably one more rate hike is expected by the end of March and then we are looking for a second rate hike also of 25 basis points by the end of June.

Q: Are you already beginning to see signs of liquidity tightening across asset classes? Which one do you think might get pinched the hardest?

A: We don’t see any signs here, I think the key point first is US has not raised rates. Secondly, Bank of Japan has only raised rates by 25 basis points and any further rate hikes there seems to be getting pushed off. We are perhaps looking for another rate hike by the ECB. But on the whole, if you look at the real interest rates in most regions, they are still pretty low. Therefore the negative impact on liquidity is not going to be that great so far.