The US is increasing Interest Rates and it might impact Indian Markets

The Indian benchmark index Sensex has plummeted by 7%, in the last six months. The benchmark index has been witnessing huge volatility. One of the major reasons behind this swing is said to be the fear of the US Fed increasing interest rates after months of quantitative easing. Indian Stock exchanges are not the only stock markets affected, Many Stock exchanges around the world have been witnessing this swing because of this very reason. One phenomenon that is affecting almost every other country across the world is high inflation. Eventually, because of this, the prices of most essential goods and services like food, clothing, housing, transport, consumer staples, etc have skyrocketed.

Global bourses have been struggling with this since the inception of the COVID-19. In a bid to tackle this pandemic, Nations around the world shut down every activity. As a result, Millions of employees were laid off by companies because of supply chain disruptions. However, Consumer demand at the same time remained very high and supply struggled. This led to an increase in the prices of essential commodities. Amid sky-high inflation in many countries, Russia’s invasion of Ukraine worsened the condition.