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RBI May face tougher path in Feb rate cut as Fed reshaped global monetary Policy Expectations
RBI faces a tougher decision on cutting interest rates in February due to a shift in the U.S. Federal Reserve's stance. The Fed's hawkish pause, stronger dollar, and higher U.S. bond yields create challenges for emerging markets like India. While domestic factors favour a rate cut, global pressures complicate the RBI's decision-making process.
The Reserve Bank of India (RBI) may face a tougher path for cutting interest rates in February, according to a report by Angel One's Ionic Wealth.
The report attributed this to a shift in the U.S. Federal Reserve's stance on rate cuts, which has reshaped global monetary policy expectations.
The report noted that the Federal Reserve's decision to pause rate hikes was not unexpected, as markets had already anticipated a shallower rate cut cycle. The Fed aligns with market projections of two rate cuts in 2025 and two more in 2026, compared to its September guidance of four cuts in 2025 alone.
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