No change likely in Fed's policy: HSBC

Excerpts from Bazaar on CNBC-TV18 Watch the full show » Nifty BSE | NSE 13/02/12 Are Mutual Funds betting on Nifty?

Peter Morgan of HSBC does not expect a change in Fed's policy. According to him, Fed's view on inflation may turn a bit neutral.

Morgan feels that Fed seems to be comfortable with inflation and growth. Shifting focus to India, Morgan anticipates RBI to hike rates by 50 bps this year.

Excerpts of CNBC-TV18's exclusive interview with Peter Morgan:

Q1: What do you expect to hear - both in terms of any policy change or the language from the Fed this time around?

A: We think the Fed is basically still pretty comfortable with the situation both in terms of inflation and growth. So we don't expect to see any change in policy per se. If there's anything, there might be some shift of language towards a slightly more neutral position on inflation risk. But it might still be little bit early for that. So we are looking for essentially no change in their policy stance and in the statement.

Q: By the way of rates though, do you expect RBI to hike the repo and reverse repo, which is what many analysts have been talking about?

A: We are looking for a rate hike by March and probably a second one by the middle of this year, so a cumulative increase of 50 basis points.

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