The US Federal Reserve in its September policy meeting left the key interest rate unchanged at 5.25-5.50 per cent but cautioned it may go for additional tightening of monetary policy if need be.
The US economy is unlikely to enter into a recession in 2023, minutes of the Federal Reserve’s July monetary policy review meeting showed, and noted that spending and real activities had improved after the banking crisis experienced earlier this year.
US Federal Reserve Governor Michelle W Bowman has said an additional interest rate increase will likely be needed to get inflation on a path down to its 2 per cent target.
Indian stock indices traded higher on Friday morning, getting support from the US central bank's latest monetary policy stance - which finally paused the interest rate after raising it for over a year.
Barring the latest pause, the US central bank has hiked the interest rate for the tenth consecutive time which was necessitated in the fight against soaring inflation.
Strength in Indian stock indices continued from the past few sessions which opened in the green on Thursday, but was limited as US Fed in its fight against inflation raised interest rates by another 25 basis points.
The recent banking crisis in the US appears to have resulted in tighter credit conditions and they are likely to hurt economic activities, said US Federal Reserve Chair Jerome Powell after the two-day monetary policy review meeting where it once again hiked interest rates in their pursuit of
The US monetary policy committee, seeking to achieve inflation at the rate of 2 per cent over the longer run, hiked the key interest rate by another 25 basis points to 5.0-5.25 per cent at its latest two-day review meet held during May 2-3.
Indian stock indices extended their positive momentum from the past week and opened in the green on Tuesday, largely due to firm GST collections and continued foreign fund inflows in April.
The Reserve Bank of India (RBI) is expected to pause their interest rate hike and the current 6.5 per cent repo rate could be the terminal rate for now, said SBI Research in its latest Ecowrap report.