The US Federal Reserve is poised to retain its benchmark interest rates in an upcoming decision, with experts anticipating minimal repercussions for the Indian stock market. During the Federal Open Market Committee’s two-day meeting, it is likely that the Fed will continue its recent pause on rate adjustments, consistent with its September decision to maintain rates in the range of 5.25% to 5.50%.

While investors and economists are keen to discern the Fed’s future stance on interest rates, most experts do not anticipate any surprises in the form of rate hikes or cuts. This outlook is grounded in the robust US economy, characterized by a 4.9% GDP growth in the September quarter and a persistent inflation rate above the Fed’s 2% target.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, expects the Fed’s message to lean towards a hawkish stance due to the US economy’s resilience. The high bond yields in the US reinforce the expectation of sustained interest rates.

Deepak Jasani, Head of Retail Research at HDFC Securities, foresees the Fed maintaining its current high interest rates, with market participants eager to gauge its views on job markets, inflation, and economic growth. Investors hope that the Fed will not adopt a hawkish tone regarding long-term interest rates.

G. Chokkalingam, Founder and Head of Research at Equinomics Research, anticipates the Fed will monitor the cumulative impact of previous rate hikes before making any changes.

Nishit Master, Portfolio Manager at Axis Securities PMS, expects the Fed to remain steady during the FOMC meeting, with a focus on combating inflation.

Trivesh D, COO of Tradejini, predicts that the Federal Reserve will persist with its hawkish approach to control inflation, indicating a potential conclusion to the rate-hiking campaign.

In the Indian stock market, experts foresee a muted response to the Fed’s decision. High bond yields may weigh on the market, with foreign institutional investors expected to continue selling, potentially providing buying opportunities in certain sectors.

The global market, including India, is prepared for the Fed to maintain rates, but any surprising commentary could influence Indian markets to a lesser extent than those in developed economies.

In conclusion, the US Federal Reserve’s decision is unlikely to trigger major repercussions in the Indian stock market, as market participants have already factored in the effects of the current record interest rates.

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