After five years of steady policy rates in the US, discussion & expectation has started on the timing and pace of the rate hikes going forward. After the September policy meeting, it is expected that first hike of 25bp hike in June 2015. Slow pace rate hike is expected and the target range for the federal funds rate at 50-75bp by end-2015 and at 150-175bp by end-2016. QE 3 tapering has been done gradually and it will be over by December 2014. The Economy growth is also showing some positive signal in the last few quarters. USD continues to surge into little-charted territory, marking an 11th consecutive week of gains (the first such instance in 4 decades). USD index touched a 4-year high of 85.49 this week. The revival of US Economy will definitely impact Fund flow to all emerging countries. Let us wait and watch how the things are unfolding.
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