Expect policy continuity even with coalition govt
There's a lot of buzz around the US Fed meeting this week. What are your thoughts?
We're still of the view that there won't be a cut till September. There will likely be two to three cuts this year and three to four cuts next year. But all of this is predicated on making progress on inflation, and inflation has been a little choppy for the first quarter. At this point, we're subscribing to a soft-landing outcome.
What are the biggest risks for the markets?
The greatest risk is a meaningful slowdown in the US. And if we're wrong about soft-landing, and we're wrong about inflation in the US, it's a risk globally that India is not immune to.
And the other big risk is the deflationary environment in China. If China continues to export deflation to the rest of the world, it means pricing power of the companies, including in India, will be eroded.
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