Russia-Ukraine crisis a side show, upcoming US Fed hikes not priced in yet: Mark Mobius

cnbctv18.com:

As most shares globally traded lower with investors remaining cautious against Russia-Ukraine tensions, market guru Mark Mobius on Tuesday said the geopolitical crisis is a side-show to the interest rate hike scenario.“What is happening in Russia and Ukraine is a side show to the whole interest rate environment because the Fed is going to raise interest rates…if you look at interest rates and the stock markets, there is really little correlation but there is a big correlation with the fixed income market, the bond market,” the Founder of Mobius Capital Partners said in an exclusive interview with CNBC-TV18.Mobius is of the view that the US Federal Reserve is a little late in announcing the interest rate hike because, according to him, if the central bank thinks CPI is a good indicator of inflation, it is not the case.“If you see inflation in America at 7 plus percent then you know that central bank is going to raise rates maybe even higher than that in order to give people real rate of interest. So we are really in rough water now,” he said.Commenting on the trend in the market, he said the Fed rate hike has not been fully priced in yet and more volatility and downside are likely along the way.“If you compare the S&P versus the MSCI India index they are almost the same, the Indian market has performed just as well as the broad S&P 500.

The S&P 500 includes companies that depend a great deal on emerging market sales and manufacturing. So in some ways, the US market is sort of a reflection of what is happening in emerging markets,” the market veteran said.Also, Mobius said if cryptocurrencies go down, the markets will be affected as well because millions of people feel rich as a result of the “so-called” money being made