Central bankers, policymakers and economists will discuss monetary policies and constraints that will define them
Reserve Bank of India Governor Urjit Patel, known for calling RBI an “owlâ€, may have turned hawkish on its monetary policy stance towards the year end.
The brokerage expects RBI Governor Raghuram Rajan to stick to the dovish April commentary and cut interest rate by 25bps in August depending on how monsoon pans out. Â Rate cut in August could put brakes on monetary policy easing, it says.
Jan Lambregts, Global Head of Financial Markets Research, Rabobank US Fed is hawkish then the statement is likely to be read as a positive because market have read dovish statements from ECB and other central banks negatively.
Jahangir Aziz, Asia economic research, JPMorgan, says it is very hard to see a monetary policy committee where the governor doesn't have a veto power, but is responsible for monitoring inflation.
"Some recent studies have raised the prospect that the economies of the United States and other countries will grow more slowly in the future as a result of both demographic factors and a slower pace of productivity gains from technological advances," the Fed chief stated.
When the governor spoke on December 3, he had given two conditions for a rate cut and he had admitted it could be outside the policy date as well. First condition was inflation being below trajectory, and second was fiscal consolidation.
Speaking to CNBC-TV18 hours before the Fed chairman Ben Bernanke makes any speech on the QE tapering, Andrew Economos of JPMorgan AMC says that Fed will aim to strike a balance between being either too hawkish or too dovish.
Considering the uncontrollable fall of Indian currency, there is a high risk of further tightening measures, says Sonal Varma of Nomura India.
The RBI in its first quarter (April-June, 2013-14) monetary policy left key rates unchanged hinting at rate cuts in future subject to market stability. With this, D Subbarao, the governor who had taken the central bank assignment in September, 2008; presented his last quarterly policy before he hangs up his boots in September this year.
The Federal Reserve's failure to communicate its guidance has made Wall Street cautious. The message from the street is to watch what the Fed does than listening to what they say.