The US Fed doing nothing, sitting pat on the rates was a given; under the current circumstances, this was the only option – no action is good action. But it wont be for too long that this status quo will continue; the US markets are already looking at a rate hike from 2022.

It was a policy decision which ‘you-blink-and-you-miss-it’ kinds. It was a complete status quo – on the interest rates front as well as the bond buying. The US markets did a “ho-hum” and continued to trade, giving not much credence to the policy.

The Fed is putting out a dovish tone and that will remain so till the threat of the pandemic looms large. Though vaccinations in the US have progressed very well and the economy is slowly and cautiously starting to look up, the Fed would most certainly have done nothing to topple the apple cart. Thus the message that we get today is – the US is doing OK but not yet out of the woods and till then, the Fed will remain dovish and sit tight on the interest rates.

This is precisely what will happen in India too; the RBI, at the moment, when the country is ravaged by the pandemic cannot but sit tight on the rates though with surging inflation, economic sense dictates the RBI to ideally hike rates. But then we are not living in ideal circumstances, are we? The MPC meet and the rate decision is scheduled much later – June 4^th. By then hopefully (fingers and toes crossed!), India would be on the mend, with the pandemic curve flattened to the ground.

For us in India, this decision or no-decision of the Fed will not have an impact; all our attention will obviously be on the pandemic first and then on earnings. It is individual companies which will attract attention. And today, there are some major earnings expected – Ambuja Cement, Bajaj Auto, Dalmia Bharat, HUL, Bank of Maharashtra, Titan, Shriram Transport Finance, to name a few.

The markets are up in the green despite the raging pandemic as the underlying belief is that we will get over this sooner than later and the second wave will not be as damaging as the first for the economy. Yes, the loss of human lives is colossal, much more than earlier but for the market, its always all about the profit and money, isn’t it?

The vaccination drive picking up speed and India showing more recoveries than infections is what will truly bring about sustainable growth – in the market and the economy. Till then, everything is like a pack of cards…