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India's GDP growth is projected at 7.2 per cent in 2024-25, around 7 per cent in the next fiscal, and after that, there is a strong likelihood that the growth will revert to the 8 per cent trend, said <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> deputy governor <keyword id="20244361" type="General" weightage="20" keywordseo="Michael-Debabrata-Patra" source="keywords">Michael Debabrata Patra</keyword>. He was speaking at the New York Fed Central Banking Seminar organised by the <keyword id="20238413" type="General" weightage="20" keywordseo="Federal-Reserve-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="Federal Reserve Bank" meta.hostid="261" meta.entityid="Federal Reserve Bank">Federal Reserve Bank</keyword> here on Monday. "...I do believe with all the strength of my conviction that India's time has come," he said, and highlighted the country heads into its future with the youngest population in the world with a median age of 28 years. Unlike in many parts of the world, the working age population is growing -- every sixth working age person is an Indian. Patra said that since independence in 1947, India's growth path has undergone three structural shifts with trend growth, having risen to 7 per cent during 2002-2019. After the severe contraction during the pandemic, a new growth trajectory averaging 8 per cent seems to be forming during 2021-24, he said. India is now regarded as the fastest growing major economy in the world. Already the fifth largest economy in terms of market exchange rates, it is poised to become the third largest economy by 2030, the senior RBI official said and added the country is already the third largest economy in terms of <keyword id="20776921" type="General" weightage="20" keywordseo="purchasing-power-parity" source="keywords">purchasing power parity</keyword>. "Our projections show that India's <keyword id="21013593" type="General" weightage="20" keywordseo="real-GDP-growth" source="keywords">real GDP growth</keyword> will be 7.2 per cent in 2024-25 and around 7.0 per cent in 2025-26 in a cyclical correction to the rebound from the pandemic. Thereafter, there is a strong likelihood that India's growth will revert to the 8 per cent trend," Patra said. On inflation, he said it is projected to average 4.5 per cent in 2024-25 and 4.1 per cent in 2025-26. Consumer Price Index (CPI) based inflation fell below target during July-August but rose to 5.5 per cent in September on the back of a pickup in price momentum in some food items and adverse base effects inherent in year-on-year measurement. "Our projection indicates that these price pressures will persist in October and November before headline inflation realigns with the target from December 2024 and remains aligned in 2025-26," the deputy governor said. He also emphasised that India is emerging as a world leader in leveraging <keyword id="20181895" type="General" weightage="20" keywordseo="digital-technologies" source="keywords">digital technologies</keyword> for transformative change.

India likely to grow at 7.2% in FY25, says RBI deputy governor

India's retail inflation is projected to surge to 6.15% in October, exceeding the Reserve Bank of India's (RBI) tolerance threshold of 6%, according to a new report by Union Bank of India. The spike is attributed to persistent <keyword id="21013592" type="General" weightage="20" keywordseo="food-price-pressures" source="keywords">food price pressures</keyword> and the waning of favorable base effects from the previous year. Earlier this month, RBI governor Shaktikanta Das also echoed similar sentiments and noted that the inflation print for October 2024 could stay well above 5.5%. This is why, as Das highlighted, cutting interest rates as early as December would be very early and premature The <keyword id="19999655" type="General" weightage="20" keywordseo="Consumer-Price-Index" source="keywords">Consumer Price Index</keyword> (CPI) data for October, which will be released at 4 pm on Tuesday, as opposed to the previous practice of releasing this data at 5:30 pm on the 12th of every month, follows September's inflation reading of 5.49%, up from 3.65% in August 2024. The last time inflation breached the RBI's upper limit was in August 2023. Despite the RBI's anticipation of an October inflation "hump," the Union Bank report suggests that the magnitude of the increase might raise concerns, particularly as November's figures are also tracking at elevated levels. The bank maintains its forecast of unchanged interest rates in December's monetary policy meeting, with a modest 50 basis points rate cut cycle predicted to begin in February 2025. Food inflation remains a key driver of price pressures, with vegetables and edible oils leading the recent surge. In September 2024, India's YoY food inflation rate hit 9.24%, up from 5.66% in the month prior. However, the report projects some easing of food inflation in the January-March quarter, citing typical winter price moderation and improving prospects for rabi crops. Despite this, potential risks from food supply disruptions, imported edible oil prices, and the impact of potential trade tariff hikes will exist. The RBI, which aims to maintain retail inflation at 4%, has held the repo rate steady at 6.5% for the tenth consecutive time in its last meeting as part of its inflation containment strategy. A recent SBI report also noted that expecting rate cuts in this quarter would be immature, and easing was possible only during the first half of 2025. "Given the current estimates of FY25 real GDP growth at 7.2% and CPI at 4.50%, the RBI would quite possibly keep policy rates stable over the coming quarter at least. Emerging trends in the growth outlook would possibly determine the timing and extent of any policy easing. With near-term CPI numbers likely to stay elevated, it’s premature to consider expectations of any easing in the December review. "However, high-frequency data do validate a softness in growth data on an incremental basis. Given the anticipated aligning of CPI closer to the target over H2, a shallow easing, if any can be a reasonable possibility over H1 of CY 25", it added.

Retail inflation expected to breach 6% mark in October, says UBI Report

Mumbai (Maharashtra) [India], August 8 (ANI): <keyword id="64190" type="General" weightage="100" keywordseo="RBI-Governor" source="Orion">RBI Governor</keyword> <keyword id="6359111" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="Orion">Shaktikanta Das</keyword> says <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> will moderate from July onwards as the monsoon has improved and <keyword id="489239" type="General" weightage="20" keywordseo="Global-food-prices" source="Orion">global food prices</keyword> have shown signs of easing in July. Das said, "Global food prices showed signs of easing in the month of July after registering an increase since March 2024." A degree of relief in food inflation is expected from the pickup in southwest monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals continue to be above the norms, according to RBI Governor Shaktikanta Das. Das added, "Assuming a normal monsoon and taking into account the 4.9 per cent inflation print, Q1 CPI inflation for the current financial year (2024-25) is projected at 4.5 per cent, with q2 at 4.4 per cent, Q3 at 4.7 per cent and Q4 at 4.3 per cent. CPI inflation for the first quarter of next financial year (Q1 2025-26) is projected at 4.4 per cent." The inflation landscape reflects mixed signals, to which Das said, "<keyword id="21258540" type="General" weightage="20" keywordseo="headline-inflation" source="keywords">Headline inflation</keyword> eased up to 5.1 per cent in June 2024 due to higher than expected food inflation. Fuel remained in deflation for the 10th consecutive month. Core inflation moderated to a historic low in the months of May and June." RBI Governor Shaktikanta Das, outlined the <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> with real <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> of 7.2 per cent for the fiscal year 2024-25 and headline inflation eased to 5.1 per cent in June, on Thursday. Das said, "Real GDP growth for 2024-25 is projected at 7.2 per cent with Q1 at 7.1 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent and Q4 at 7.2 per cent. Real GDP growth for Q1 2025-26, this is something which we are giving for the first time, is projected at 7.2 per cent. The risks are evenly balanced." He added, "We have slightly moderated the <keyword id="387719" type="General" weightage="20" keywordseo="growth-projection" source="Orion">growth projection</keyword> for the first quarter of the current financial year in relation to the projection we gave in the previous MPC in June. This is primarily due to updated information on certain high-frequency indicators which show lower than anticipated corporate profitability, general government expenditure and core industries output." This forecast marks a slight moderation from previous estimates provided in the Monetary Policy Committee (MPC) meeting in June, attributed to recent updates on high-frequency indicators such as corporate profitability, general government expenditure, and core industries output. The inflation landscape reflects mixed signals, to which Das said, "Headline inflation eased up to 5.1 per cent in June 2024 due to higher than expected food inflation. Fuel remained in deflation for the 10th consecutive month. Core inflation moderated to a historic low in the months of May and June." Balancing robust growth projections with a nuanced understanding of inflation dynamics Governor Das stated, "Food inflation which has a weight of around 46 per cent in the CPI basket, contributed to more than 75 per cent of headline inflation in May and June. Vegetable prices increased sharply and contributed about 35 per cent to inflation in June. High inflation pressures persisted across other major food items also." Governor Das mentioned softening in core inflation continues to be broad-based with core services inflation touching a new low in the current CPI series during the month of May and June 2024. Das stated, "The high food price momentum likely to have continued in the month of July also. Large favourable base effects may however push headline inflation downwards in July. The Impact of the revision in milk prices mobile tariffs also needs to be carefully monitored." A degree of relief in food inflation is expected from the pickup in south west monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals continue to be above the norms, according to RBI Governor Shaktikanta das. Das anticipates some relief in food inflation due to the expected pickup in the southwest monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals remain above the normative levels, contributing to a more stable food price environment. Global food prices, which have been on an upward trajectory since March 2024, showed signs of easing in July.

RBI Governor Shaktikanta Das projects 7.2% GDP growth for 2024-25, reports eased inflation to 5.1% in June

<ul class="summary-list"><li>President-elect Donald Trump said he would implement tariffs on imported goods.</li><li>Economists said the proposals could boost inflation and raise prices for consumers.</li></ul>One of the first policies President-elect <a target="_blank" class="" href="https://www.businessinsider.com/election-results-trump-harris-presidential-election-2024-11">Donald Trump</a> is expected to enact after being sworn into office is imposing <a target="_blank" class="" href="https://www.businessinsider.com/cost-expensive-goods-price-impact-presidential-election-scenarios-trump-harris-2024-10#imported-goods">taxes on imported goods</a>.Many economists say these tariffs, as well as some of his other proposals, could kick-start another bout of inflation and interest-rate hikes.Trump has said that his proposals would not impact US prices. "I am going to put tariffs on other countries coming into our country, and that has nothing to do with taxes to us. That is a tax on another country," he said in an August speech.Some experts have argued <a target="_blank" class="" href="https://www.businessinsider.com/trump-tax-plan-tarriffs-benefits-top-earners-study-2024-10">otherwise</a>. Economists and investors project that taxes imposed on imports will be passed on to American consumers in the form of higher prices. In an economic chain reaction, households would then pay higher interest rates on borrowing of all kinds as the Fed moves to tame that newly rekindled inflation.<h2 id="28eee089-e5e3-42d1-bc61-18122840af26">Ramping up tariffs from Trump's first term is expected to eat into Americans' wallets</h2>On the campaign trail, one of Trump's cornerstone proposals was a 60% <a target="_blank" class="" href="https://www.businessinsider.com/where-does-trump-vance-stand-on-china-tariffs-inflation-taxes-2024-7">tariff</a> on goods imported from China and a 10% to 20% tariff on imports from other countries.The US Census Bureau reported that broad tariffs would likely affect the prices of automobiles, drugs for human and veterinary use, food and beverages, furniture, and household appliances.Trump could announce these changes as soon as he takes office because they would not require congressional approval, but because implementation could take time, consumers would not see higher prices immediately.An <a target="_blank" class="" href="https://www.piie.com/sites/default/files/2024-09/wp24-20.pdf">analysis</a> from the nonpartisan Peterson Institute examined Trump's proposed 60% tariff on goods imported from China and estimated that it would boost inflation by 0.4 percentage points in 2025. The estimate does not include Trump's proposal for a 10% to 20% tariff on other imports.Markets are also <a target="_blank" class="" href="https://markets.businessinsider.com/news/bonds/surging-treasury-yields-after-trump-win-show-borrowers-may-not-get-relief-2024-11">expecting higher inflation</a> under Trump; bond yields surged following Trump's victory. That led to the 30-year fixed mortgage rate rising, meaning homebuyers are on track to see higher interest rates on loans.An <a target="_blank" class="" href="https://taxpolicycenter.org/taxvox/tpc-trump-tariffs-would-raise-household-taxes-and-slow-imports">analysis</a> by the nonpartisan Tax Policy Center found that Trump's policies would decrease posttax incomes by an average of $1,800 in 2025. A separate <a target="_blank" class="" href="https://www.americanprogressaction.org/article/trumps-tariff-would-cost-the-typical-american-household-roughly-1500-each-year/">analysis</a> by the left-leaning Center for American Progress said that his tariff plans could cost the typical American household an extra $1,500 a year.Tariffs are typically used to raise government revenue and bolster domestic manufacturing. Trump enacted them in his first term as part of his "America First" policies, including a 25% tariff on Chinese goods that ultimately <a target="_blank" rel="" class="" href="https://www.businessinsider.com/trump-tariff-trade-war-risk-china-exports-great-depression-economy-2024-5">led to a trade war</a> between the two economies. While they did not significantly impact inflation, they did raise taxes for consumers. The Tax Foundation <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/where-does-trump-vance-stand-on-china-tariffs-inflation-taxes-2024-7">estimated</a> that Trump's tariffs during his first term amounted to a nearly $80 billion tax increase on Americans buying Chinese imports.Trump's win is also expected to influence the Federal Reserve's upcoming decisions on interest rates. While it's too soon for the Fed to make any adjustments since Trump has not yet implemented any tariffs, members of the Federal Open Market Committee will likely begin discussing how Trump's future economic policies could affect consumers — including whether the central bank would need to hike interest rates in the future in response to inflationary pressure.The Fed is expected to <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cuts-federal-reserve-election-jerome-powell-inflation-jobs-2024-11">cut interest rates by 25 basis points</a> on Thursday, and Fed chair Jerome Powell will likely offer some insight into the Fed's direction following Trump's victory.However, the future of the Federal Reserve <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cut-trump-fed-powell-reaction-independence-history-2024-9">is uncertain under Trump</a>. The president-elect has previously suggested that he would like to have a say over interest-rate decisions, something presidents do not currently have. This raises the question of whether the central bank would continue to remain politically independent.Americans will likely learn more about what to expect from Trump as the year comes to a close. While Trump has maintained that his policies will help the economy and leave Americans better off, the Nobel Prize-winning economist Joseph Stiglitz <a target="_blank" class="" href="https://www.businessinsider.com/trump-presidency-policies-inflation-economy-americans-joseph-stiglitz-letter-2024-6">previously told Business Insider</a> that the "general consensus" among experts is that "the Trump administration would be more inflationary.""The broad assessment of the consequences of that is that the Fed would be forced to raise interest rates, and all that combined would still serve to increase inflation even as unemployment increased and GDP slowed," he said.

Get ready for inflation and interest rates to rise again

Global markets are looking ahead to the US Fed's meeting scheduled for Thursday, November 7, 2024, expecting the Jerome Powell-chaired FOMC (Federal Open Market Committee) to slash interest rates further by 0.25%. In September this year, the Fed surprised the markets by cutting interest rates by a massive 0.5%, for the first time in 4 years. As per the <keyword id="23807624" type="General" weightage="20" keywordseo="CME-Fed-Watch-Tool" source="keywords">CME Fed Watch Tool</keyword>, there is now a 99.5% chance that the Fed will reduce the interest rates by around 25 basis points, bringing it within the range of 4.5% to 4.75%. Only 0.5% believe that the Fed might leave the rates unchanged, within their present range of 4.75% to 5%. As for the Fed's December meeting, scheduled for December 18, per the CME Fed Watch tool, 79.5% believe that interest rates would be in the range of 4.25% to 4.5%. Another 20.4% believe that yields will remain in the range of 4.5% and 4.75%. Only 0.1% see the interest rates staying within their current range of 4.75% to 5% <h2>No major changes anticipated</h2>However, it is unlikely that this quarter-point rate cut would bring about any significant financial changes in the US economy. The Fed is again expected to bring down the interest rates by another 25 basis points in their December meeting. This would imply a total rate cut of about 50 basis points by the end of this year. So, why is the Fed not bringing down interest rates by 50 basis points in one fell swoop this time around? Why wait till December to bring down the rates by another 25 basis points? Experts believe that it could stoke inflation, which has seen a sharp decline in the recent past. A steep slash of borrowing rates could accelerate borrowing activity and inject significant cash into the economy at once, pushing up inflation. Per the Fed's recent projections, a total of 4 rate cuts are anticipated in 2025. On a YoY basis, inflation in the US dipped to 2.4%, close to the Fed's target of 2%. With inflationary pressures reined in, the economy growing at the rate of 2.8% during the third quarter of FY24, and the unemployment rate down to 4.1%, the markets see much merit in bringing interest rates down. This is especially important to boost spending, particularly in sectors such as housing and automobiles, where even a slight tinkering in interest rates can drastically impact the amount and volume of loans taken to own them. Data suggests that during Trump's presidency tenure, i.e., between 2017 and 2021, inflation averaged at a rate of 1.9% a year. During the Biden administration, where Kamala Harris served as VP, the inflation is on track to average around 5% a year. Shrisha Acharya, Vice President, Anand Rathi Global Finance, also notes that the results of the impending US elections, which are likely to be declared tomorrow, will impact the yields and stock markets. "The Trump card, coupled with potential Republican control, could mean higher bond yields due to anticipated increases in deficit spending, inflation risks, and potential tax cuts. This could very well jiggle the confidence in U.S. Treasury bonds and thus start a chain effect that will possibly impact global market stability and lead to short-term volatility. On the other hand, Harris’ rise has been met with a stock market rally glued on expectations of economic stability and controlled inflation, with more predictable fiscal policy likely to help in a soft landing," he explains.

What can you expect from the US Fed meeting later this week? Here's all you need to know

<ul class="summary-list"><li><keyword id="19935006" type="General" weightage="100" keywordseo="Guyana" source="keywords">Guyana</keyword>, the tiny South American nation, plans to give $500 to every citizen aged 18 and over.</li><li>Its president said the <keyword id="21044249" type="General" weightage="20" keywordseo="cash-payments" source="keywords">cash payments</keyword> aim to narrow disparities and help with higher living costs.</li></ul>The world's fastest-growing economy is giving the equivalent of $500 to each of its adult citizens as it works to share its newfound oil wealth and soften the sting of higher living costs. President <keyword id="21170274" type="General" weightage="20" keywordseo="Mohamed-Irfaan-Ali" source="keywords">Mohamed Irfaan Ali</keyword> of Guyana, the South American country with just 800,000 people, announced the move last week and said his government would begin distributing the cash immediately. He previously said each household would receive the Guyanese-dollar equivalent of $1,000, but switched to an individual payment after locals raised concerns about how a household would be defined and how the money would be shared within each home. "This is how we are promoting prosperity, ownership, distribution of wealth," Ali said. "This is how the resources and revenue of this country are being spent every single day to lift the lives of people, to expand national wealth, coastal wealth, and community wealth." Guyanese authorities have taken other steps to combat the rising cost of living, the post noted. They've removed more than 200 taxes and fees, including the excise tax on fuel and VAT on water, electricity, and some basic foods. They also gave a one-time, tax-free grant worth about $120 a person to a group that included teachers and public servants last year. Nicolas Suarez, a senior economist at S&amp;P Global Market Intelligence who covers Latin America, told Business Insider the original plan would "increase the average household's disposable income, alleviating some budget constraints." He estimated the initial program's scale at 1.5% of national GDP and 7.9% of Guyana's Natural Resource Fund, which officials set up in 2019 to prudently manage the country's oil revenues. The scale of the updated plan is less clear. World Health Organization data suggests there are about 711,000 Guyanese aged 15 and over, so if we assume the 18+ population is 660,000 people and all of them receive $500 each, the program could cost $330 million —not far off the government's estimate of $290 million for the original household payout. "In the short term, this measure could boost private consumption growth, but it may not ease <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword>ary pressures," Suarez said about the previous plan. "On the contrary, higher government expenditures could lead to significant inflationary pressures over the next 12 months." He noted that inflation in Guyana has climbed from a pre-pandemic average of 2.3% a year to 3.3% in August. He noted that <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-is-inflation">inflation</a> in Guyana has climbed from a pre-pandemic average of 2.3% a year to 3.3% in August. <h2>Riding an oil wave</h2>Guyana, an English-speaking former colony that gained independence from Britain in 1966, borders Venezuela to the west, Brazil to the south, and Suriname to the east. Its natural resource fund is similar to <a target="_blank" class="" href="https://www.businessinsider.com/norway-sovereign-wealth-fund-to-dump-russian-assets-ukraine-invasion-2022-2">Norway's oil fund</a>, set up in the 1990s to invest profits from the Scandinavian nation's oil-and-gas sector, protect the economy from fluctuations in energy revenues, and serve as a financial reserve and long-term savings plan for Norwegians. Norway's gas-powered sovereign wealth fund has helped to make it one of the world's wealthiest countries with an estimated population of 5.5 million and a GDP per capita of about $88,000 last year, according to World Bank data. Its oil fund held over $1.7 trillion of assets at the end of June, or more than $300,000 per Norwegian citizen. <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-chevron-hess-guyana-oil-economy-berkshire-hathaway-stock-2023-10">Exxon</a>, which has discovered an estimated <a target="_blank" class="" href="https://markets.businessinsider.com/news/commodities/oil-market-outlook-opec-price-cuts-us-crude-production-guyana-2023-12">11 billion barrels of oil equivalent</a> off Guyana's coastsince 2015, forecasts the country will produce about 1.3 million barrels a day once the company's six projects are online in 2027. That amount rivals Qatar's current output and would rank Guyana among the world's 20 largest oil producers. Guyana ramped up production to more than 600,000 barrels a day earlier this year, fueling roughly 50% <a target="_blank" class="" href="https://www.businessinsider.com/oil-market-guyana-economy-crude-production-outlook-opec-price-cuts-2023-12">GDP growth</a> in the first half and putting Guyana on track to grow about 43% this year, Ali said in an August webcast. Real GDP soared by about 62% in 2022 then 33% in 2023, while GDP per capita has surged from $7,000 in 2020 to around $26,000 this year, International Monetary Fund data shows. <h2>Sharing the wealth</h2>Guyana's payment to its people "sounds like great news," Karl Widerquist, a philosophy professor at Georgetown University-Qatar and the author of several books about universal basic income (UBI) told BI. He described the one-time distribution as "basic capital" or a "stakeholder grant" instead of a basic income, but said "it's a big step in that direction if they go through with it." UBI typically refers to a recurring cash payment made to every individual in a society regardless of their wealth, with no restrictions on <a target="_blank" class="" href="https://www.businessinsider.com/how-people-spend-universal-basic-income-ubi-food-housing-transportation-2024-4">how the money is spent</a> and no requirement to pay it back. Proponents hail it as a safety net against poverty that relieves financial strain and frees people to change jobs, start businesses, and weather periods of bad luck without stressing about paying their bills. Guyana's one-off, unconditional cash grant is a "positive step," Cleo Goodman, the basic income lead at the Autonomy Institute think tank, told BI. "This is a welcome injection of cash for citizens." However, she noted a guaranteed, regular income would be a "much more comprehensive commitment to redistributing this newfound wealth." Guyana was colonized by the Netherlands before Britain gained control in the late 18th century. The nation, which shares borders with Venezuela, Brazil and Suriname, became independent in 1966. Correction: October 18, 2024 — An earlier version of this story mistakenly reported an outdated version of the policy. Guyana announced Wednesday it had decided to give the equivalent of $500 to every adult, rather than a higher amount to each household as previously planned. The story also misstated the value of the previously announced figure in US dollars. It was $1,000 a household, not $2,000.

This tiny country says it will give $500 to every adult as an Exxon oil boom supercharges its economy

The <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> announced the decision of the newly formed six-member MPC (<keyword id="19913109" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="keywords">Monetary Policy Committee</keyword>) today, following the conclusion of the three-day meeting, which began on October 7, 2024. Treading along expected lines, RBI rate-setting panel left the repo rate unchanged at 6.5% for the 10th consecutive time, in its 51st meeting today. The decision was made by a majority, with 5 out of 6 members voting for leaving the rate unchanged. This is the fourth bi-monthly monetary policy review for FY25, and the first since three external members were appointed to the panel earlier this month. The tenure of the previous three members had come to an end on October 4, 2024. While the outgoing members include Ashima Goyal (emeritus professor, Indira Gandhi Institute of Development Research), Shashanka Bhide (honorary senior advisor, National Council of Applied Economic Research); and Jayanth R. Varma(professor, Indian Institute of Management, Ahmedabad), the income members are Ram Singh (Director, Delhi School of Economics), Saugata Bhattacharya, an economist; and Nagesh Kumar (Director and chief executive, Institute for Studies in Industrial Development). <h2>Wait and Watch </h2>RBI also changed its policy stance to neutral, while remaining committed to growth and bringing down inflation to its target of 4%. This means that at present, the bank is not inclined to either increase or decrease the interest rates, but will take a call depending on macroeconomic conditions and prevailing factors. "Taking all these factors into consideration, the real GDP growth for 2024-25 is projected at 7.2%, with Q2 at 7%, Q3 at 7.4% and Q4 at 7.4%", he said. As for inflation, Das highlighted that headline inflation had softened significantly in July and August and even food inflation experienced a certain degree of correction during these two months. Keeping this in mind, CPI inflation for 2024-25 i.e. current year is projected at 4.5%, with Q2 at 4.1%, Q3 at 4.8% and Q4 at 4.2%. CPI for first quarter of next financial year i.e. 2025-26 is estimated at 4.3%. "It's with a lot of effort that inflation horse has been brought to the stable, i.e. closer to the target and within the tolerance span, compared to its place or heightened levels two years ago. We have to be very careful about opening the gate, as the horse may simply hold again. We must keep the horse in tight leash, so that we do not lose control", Das added. Most economists had anticipated a change in the central bank's current policy stance of 'withdrawal of accommodation'. This policy stand indicates that any interest rate cuts are presently off the table. However, given the ongoing geopolitical crisis and Fed's jumbo rate cut by 50-basis points last month, RBI may bring about a cut in interest rates, sooner than later. However, since food inflation remains high at 5.42% as of July 2024, experts had also estimated that now might not have been a good time for RBI to bring down interest rates. Moreover, PMI (purchase managers index) indices, which help in gauging the health of manufacturing and service sectors in the country, presently stand at a multi-month low, and even the core sector output is witnessing a contraction after 42 straight months. As Suman Chowdhury, Executive Director &amp; Chief Economist, Acuité Ratings &amp; Research had highlighted, the current circumstances are not really conducive for RBI to opt for any affirmation action towards an easier monetary policy. "While the fear of the inflation “elephant” may have subsided with the CPI headline print well within 4.0% over the last two months and a favorable monsoon, the concerns around the stability of food inflation still linger among policy makers. The RBI may wait till December 2024 or February 2025 to make a rat cut, he continued. <h2>Housing sector rejoices</h2>From the point of view of homebuyers, the relatively affordable home loan interest rate regime will continue at a critical time for the Indian housing market - the festive season - amid rising housing prices and tapered sales. Q3 2024 saw average housing prices rise by a cumulative 23% in the top 7 cities even as average prices in these markets collectively rose to approximately Rs 8,390 per sq. ft. by Q3 2024-end, from Rs 6,800 per sq. ft. in Q3 2023. "The unchanged home loan rates are much-needed demand support in the ongoing festive quarter. We are expecting faster sales momentum in Q4 2024 when compared to the preceding quarter. This year's festive quarter may see similar demand to that seen in this period a year ago, if not higher. Over 1.27 lakh units were sold across the top 7 cities back in Q4 2023. Unchanged interest rates will play and important role in achieving and maintaining this momentum", says Anuj Puri, Chairman - ANAROCK Group

RBIs MPC meet concludes today: Repo rate left unchanged at 6.5%

Prime Minister Narendra Modi, on Wednesday, congratulated Reserve Bank of India's (RBI) Governor, Shaktikanta Das for bagging an A+ grade rating in the Global Finance Central Banker Report Cards 2024. Prime Minister in a post on social media "X" said, "Congratulations to RBI Governor Shri @DasShaktikanta for this feat, and that too for the second time. This is a recognition of his leadership at the RBI and his work towards ensuring <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> and stability." <keyword id="20850250" type="General" weightage="20" keywordseo="RBI-Governor-Das" source="keywords">RBI Governor Das</keyword> has been awarded the A+ grade rating for the second consecutive year. The Central Banker Report Cards, published annually by Global Finance since 1994, grade the central bank governors of nearly 100 key countries, territories, and districts, as well as the European Union, the Eastern Caribbean Central Bank, the Bank of Central African States and the Central Bank of West African States. Grades are based on an "A+" to "F" scale for success in areas such as <keyword id="21364628" type="General" weightage="20" keywordseo="inflation-control" source="keywords">inflation control</keyword>, economic growth goals, currency stability and <keyword id="22859834" type="General" weightage="20" keywordseo="interest-rate-management" source="keywords">interest rate management</keyword>. "A" represents an excellent performance, down through "F" for outright failure. "Central bankers have waged war against <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> over the past few years, wielding their primary weapon: higher interest rates. Now, countries around the world are witnessing the tangible results of these efforts, as inflation has dropped significantly," said Global Finance founder and editorial director Joseph Giarraputo. The RBI has been successful in controlling the larger macroeconomic situations in the country. The apex bank is actively working to push economic growth through its <keyword id="20900764" type="General" weightage="20" keywordseo="monetary-policies" source="keywords">monetary policies</keyword>. The RBI recently kept the the <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword> unchanged at 6.5 per cent after the deliberations of the Monetary Policy Commitee meeting earlier this month. The move reflects the central bank's cautious approach amid ongoing economic uncertainties. Announcing the monetary policy decisions, Das had said that the decision to keep the repo rate steady comes amidst persistent concerns about inflation, which remains above the RBI's target range. RBI Governor Das said that the inflation will moderate from July onwards as the monsoon has improved and global food prices have shown signs of easing in July. The Q1 <keyword id="19999655" type="General" weightage="20" keywordseo="Consumer-Price-Index" source="keywords">Consumer Price Index</keyword> (CPI) inflation for the current financial year (2024-25) is projected at 4.5 per cent. CPI inflation for the first quarter of the next financial year (Q1 2025-26) is projected at 4.4 per cent, as announced by the RBI Governor. India's retail inflation, after breaching 5 per cent in June, softened drastically in July. In line with the moderation in retail inflation, wholesale inflation in India too witnessed a sharp decline in July. The annual rate of inflation based on all India Wholesale Price Index (WPI) numbers is 2.04 per cent (provisional) for July 2024 (over July 2023).

PM Modi congratulates RBI Governor Das on A+ rating in Global Finance Report

<ul class="summary-list"><li>Trump's victory over Harris raises questions about Republican control of the House.</li><li>Wall Street strategists are closely monitoring financial markets and potential policy impacts.</li></ul>It's fair to say that much of <a target="_blank" class="" href="https://www.businessinsider.com/stock-market-post-election-results-bullish-trump-trade-peter-tuchman-2024-11">Wall Street didn't get enough sleep</a> on election night after being caught off guard by the speed at which results began coming in.Dominic Pappalardo, the chief multi-asset strategist at Morningstar Wealth, was home watching <a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/polymarket-prediction-betting-markets-vindicated-by-trumps-strong-showing-1033958821">prediction markets</a> and how percentages were skewing state by state. He was also keeping an eye on financial markets to see if they were making directional moves.Over in London, Richard Kelly, the head of global strategy at TD Securities, was on his firm's trading floor, busy answering endless client questions on 'What about this' and 'What about that'-type scenarios."As much as we all tried to think ahead of what the different policies would be, there are always a lot more questions that come up on the day, and they all have to be much more concrete," Kelly said. "So it's just been a whirlwind."Former President <a target="_blank" class="" href="https://www.businessinsider.com/election-results-trump-harris-presidential-election-2024-11">Donald Trump's victory</a> over Vice President Kamala Harris has been called for Tuesday's election, but Wall Street is still waiting on one more key answer: <a target="_blank" class="" href="https://www.businessinsider.com/congress-balance-of-power-results-competitive-republicans-democrats-2024-11">Will Republicans take the House</a>, too? It seems increasingly likely. Yet, the result would be based on a handful of seats."Technically, we don't need to know until the first half of December legally, and these things are so close in terms of the margin of error," Kelly said. "There's some of these races where literally hundreds of ballots is the differential of Republican versus Democrat. So it's not going to be today."The small tilt in the House makes a big difference because a handful of seats are enough to create some friction on Trump policies, Kelly noted.<h2 id="e4827f7a-5ee5-4a62-aa3b-da6a8ce8b3ef">Stocks</h2>Sector rotations among stocks are slightly muddy because the overall <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/us-election-trump-stock-rally-rise-sp500-outlook-regulation-mergers-2024-11">market is up so much that everything rallied</a> with the broad market, Pappalardo said. But one noteworthy sector is financials, which performed better than the overall market into Wednesday's early trading hours. It's unsurprising since the Republicans campaigned on policies favorable to banks and financial stocks, including decreased regulation. The steepening yield curve is also positive for banks as it boosts their profit margins since they borrow on the front-end yield and lend at the back-end yield, he added.Technology is another sector the market is viewing favorably: Tech companies have been creating a lot of profit, so Trump's promised corporate tax cuts will be quite beneficial, Pappalardo said.Meanwhile, the utilities sector lagged the broader market the most as we moved into Wednesday's early trading hours. Investors moving away from defensives toward cyclicals is likely a sign that investors believe the economy is positioned for growth, Pappalardo noted.While the rallies are positive for stocks, looking ahead, Pappalardo expects things to return to normality. In other words, investors will focus on traditional fundamentals like corporate earnings and interest rate policy.<h2 id="5e50dfbb-c80b-4dee-8272-69eff4f2145f">Bonds</h2>Wednesday was a long day for Gennadiy Goldberg, the head of US rates strategy at TD Securities. He stayed up past midnight watching the yield move before passing the baton off to his colleagues in London."Once the polls started to close, the market already started to move," Goldberg said. "It took the market very little time to start penciling in higher odds of the Trump victory."The swift and strong Republican win pushed the 10-year yield up from around 4.3% to around 4.45%.The <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-is-a-bond#:~:text=Bonds%20are%20loans%20that%20investors,the%20principal%20investment%20at%20maturity.">bond market</a> was expressing signs of nervousness. This sector of the market is worried about who's going to pay the bill for potentially higher budget deficits. The result is a pricing-in of higher debt premiums, Goldberg said.Additionally, aggressive immigration and tariff policies could be inflationary. And if it looks like inflation pressures are either reaccelerating or just stubbornly high, it could leave the Fed nervous about cutting rates further, Goldberg said.Kelly added that the 10-year could still move higher to 4.75%, and that's where he thinks the market could get more comfortable buying.<h2 id="b628f761-842f-464c-a039-7d296873c4e9">Currencies</h2>Jayati Bharadwaj, a global FX strategist at TD Securities, was at home in front of multiple screens until about 1 a.m. as she watched <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-is-forex">currencies move</a> amid the strong Trump lead. Initially, she expected the results to take a few days to become clear, but she was surprised by how quickly the outcome became evident. Currency markets also reacted swiftly against the backdrop of a strengthening dollar."The Chinese renminbi, the Mexican peso, and the euro were hit particularly hard because once markets saw the election results being called, they had to start pricing in the threat of tariffs," Bharadwaj said.She expects the euro to trade even weaker relative to the dollar once Trump takes office. Right now, it's trading at $1.07; expect it to move to $1.05, she said. If the Republicans take the House, then the euro could drop below $1.05, she added.Kelly added that China has been under the microscope since Trump talked about 60% tariffs on its imports. Other countries could face 10% tariffs across the board. So, if you're highly leveraged to trade, like Europe or the UK, it could be very negative for the euro and pound. He noted that it could also be negative on the currencies of Canada and Mexico, depending on how USMCA members will be impacted.On the flip side, the yen could weaken less than other currencies relative to the US dollar. The Bank of Japan may return to rate hikes over the next few months after it had paused, Kelly said. This means watch out for further unwinding in the yen carry trade. Therefore, the next question investors have to ask is: how many long equity positions have been funded at very low Japanese rates, Kelly said.For this reason, Bharadwaj cautions traders about jumping back into any carry trades because there will be a lot of currency volatility.<h2 id="2b454727-3f51-473d-b815-35fcf1e90886">Gold</h2>One surprise is that <a target="_blank" class="" href="https://markets.businessinsider.com/commodities/gold-price">gold hasn't weakened</a> as much as expected, Kelly said. As the dollar strengthened, he anticipated a more significant pullback. Given the uncertainty and volatility that took place the day after the elections, it might be too soon as investors digest results. However, he anticipates further weakening in gold, which is down 2% from Election Day.

Chief strategists project their outlooks on stocks, bonds, currencies, and gold amid a Trump victory 

<ul class="summary-list"><li>The upcoming inflation report will help determine the Fed's next move. </li><li>Friday's surprisingly strong jobs data has slashed bets of a half-point rate cut.</li></ul>The labor market's unexpected surge in September has left investors wondering about the path of Federal Reserve policy after the central bank said it's shifted focus to the labor market after years of battling inflation. However, following the strong payroll report, market commentators say they're still concerned that inflation may not be completely in the rear-view — and next week's consumer price index report will be key. The US saw an astonishing 254,000 new jobs added last month, smashing consensus estimates of 147,000. The unemployment rate dropped to 4.1%.According to economist Mohamed El-Erian, this permits the Fed to once again devote some of its attention to fighting inflation. Inflation concerns took a back seat in recent months as the central bank <a target="_blank" href="https://www.businessinsider.com/fed-rate-cut-explained-inflation-labor-market-conditions-outlook-recession-2024-9">shifted focus</a> toward what appeared to be a deteriorating labor picture. But with September's jobs report crushing expectations, concerns may <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-10-04/summers-says-50-basis-point-cut-in-september-was-a-mistake">have been premature</a>. "For the Fed, it means push back much harder against pressure from the markets to put you in the single-mandate box," El-Erian told <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-10-04/el-erian-warns-fed-after-jobs-data-inflation-is-not-dead">Bloomberg TV</a>. "Enough talk about 'inflation is dead.' Inflation is not dead. Enough talk about the Fed should only be concerned about maximum employment."UBS suggested that the upcoming consumer price index report will be the next big thing for markets. "CPI for September will be a key data release. If prices rise faster than expected on top of the stronger labor data, chances for the Fed to skip the November meeting will increase," UBS senior economist Brian Rose said in a Friday note.Bank of America analysts wrote on Friday that the Fed may have panicked last month and that another jumbo cut is probably not warranted. The bank adjusted its forecast for the November Fed meeting to call for a 25-basis-point move after previously predicting 50 basis points. Few analysts have implied that the Fed will leave interest rates unchanged next month, but investors have markedly readjusted expectations.Virtually no trader projects that the Fed will slash interest rates by a half-point in November, although the odds of another big move stood at around 33% before Friday's jobs report. <a target="_blank" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">CME FedWatch data</a> now indicates a 99% chance of a quarter-point cut.Just 1% expect rates to be unchanged. How inflation data could compound these forecasts will be known on Thursday, when the CPI report comes out.Though banks such as Barclays have suggested that the job market's strength has the potential to renew inflation concerns down the line, a large upswing is by no means a consensus call.For instance, Bank of America forecasts a 0.1% and 0.3% month-over-month gain in September's headline and core CPI, respectively. Those moves shouldn't be enough to impact the Fed's thinking.Still, with inflation still slightly above the central bank's 2% target , some analysts are cautioning investors not to forget about price pressures. According to Principal Asset Management's Seema Shah, the labor surprise only makes this more relevant."Markets will need to keep a closer eye on inflation as, now, there are policy risks on both sides of the economy," the chief global strategist said.

You Searched For "inflation projection" and got 10 results

India likely to grow at 7.2% in FY25, says RBI deputy governor

PTI

Retail inflation expected to breach 6% mark in October, says UBI Report

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RBI Governor Shaktikanta Das projects 7.2% GDP growth for 2024-25, reports eased inflation to 5.1% in June

ANI

Get ready for inflation and interest rates to rise again

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What can you expect from the US Fed meeting later this week? Here's all you need to know

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This tiny country says it will give $500 to every adult as an Exxon oil boom supercharges its economy

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RBIs MPC meet concludes today: Repo rate left unchanged at 6.5%

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PM Modi congratulates RBI Governor Das on A+ rating in Global Finance Report

ANI

Chief strategists project their outlooks on stocks, bonds, currencies, and gold amid a Trump victory

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'Inflation is not dead': Consumer prices are still in focus for investors despite the Fed's labor-market pivot

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