US Fed decision today: Will it be the last hike of the current cycle? How could it impact the Indian market?

livemint.com:

Explained: Why has the US not slipped into a recession yet? What are the odds of a US recession in the near term? Experts pointed out that market participants across the globe will be closely watching Fed chief Jerome Powell’s comments about the disinflation process in the US and the likely trend in interest rates. Fed is expected to remain data-dependent to decide on rate hike trajectory. Experts believe that a substantial part of the rate hike cycle is behind us.

However, for rates to reduce, more evidence of a sustained reduction in the inflationary outlook is required. Read more: US economic soft landing hinges on Fed’s tolerance of inflation Experts expect a 25 bps rate hike today and do not see any significant impact of it on the mood of the market. However, if the Fed signals that it is ready to end the rate hike cycle now, the market may see sharp gains.

"The market's reaction tomorrow will be driven by the Fed's commentary rather than the 25 bps rate hike, which has already been priced in. Investors need to monitor the Fed's outlook for insights into future monetary policies and their potential impact on various sectors and asset classes," said Anita Gandhi, Whole Time Director, and Head of Institutional Business at Arihant Capital. G.

Chokkalingam, Founder & Head of Research at Equinomics Research Private Limited expects the domestic market to remain neutral if the rate hike is just 25 bps as it is widely expected. However, Chokkalingam said if there is any surprise move to pause the rate this time then the markets across the world including Indian markets will jump significantly. Only these scenarios are possible as a 50 bps rate hike is unwarranted at this Juncture.