Fed meeting outcome today: How it may impact Indian stock market
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The outcome of the Federal Reserve's meeting today will have a significant impact on the Indian stock market. Chair Jerome Powell could decide to maintain interest rates or make a hawkish pivot. The decisions of the Federal Reserve, especially on interest rates, have a profound impact on global markets, including India. Foreign investors invest in the Indian markets due to the relaxed interest rate regime. When the Federal Reserve hikes interest rates, US investors tend to liquidate their Indian holdings and invest in US treasuries. An increase in US interest rates also weakens the Indian rupee against the dollar. The Federal Reserve is expected to maintain its benchmark interest rate at 5.25-5.5% in the upcoming FOMC meeting. Inflation in the US is still running high, and the Federal Reserve's interest rate hikes have not yet delivered the desired results. The decisions made by the Federal Reserve will be closely analyzed by foreign institutional investors, and their investment decisions can impact the Indian markets.
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