Fed rate hike is at least 6-9 months away: Arnab Das

In a chat with ET Now, Arnab Das, MD (Macro Strategy), Trusted Sources, shares his views on the Fed policy.

ET Now: Is it safe to presume that within the Fed, there is a sort of view that the economy can stand right now on its own feet?

Arnab Das: That is right. We are moving in that direction but we are still talking about a rate hike that is several months away, maybe six to nine months after the Fed finishes the tapering process. This is about bank credit and lending to households and small and medium enterprises, which are the ones that directly borrow from banks as opposed to large corporations, that are borrowing through the capital market.

That process tends to have historically lagged in responding to policy changes. It is going to be a process and it is still a fairly slow and gradual process for the structural reasons mentioned and for the structural changes that are taking place in the economy where people cannot really afford to buy these mansions anymore.

So they will rent apartments and that does move the needle on the growth process but not in quite the same way that it used to. So it is still very gradual I would say.