Brent crude breached the $100 per barrel mark as fighting intensified in West Asia, prompting worries about a surge in India’s oil import costs. The price spike threatens to add to inflationary pressures and fiscal strain on the Indian economy.
President Trump pressures the Federal Reserve to cut interest rates, arguing that doing so could spur unprecedented economic growth. However, economists warn that this may reignite inflation
Federal Reserve chair Kevin Warsh faces pressure from President Trump to lower interest rates despite market expectations for a hike. A strong jobs report adds complexity, with next week's inflation data likely determining the Fed's decision on rates.
Federal Reserve Governor Christopher Waller is inclined to remain patient on interest rates, influenced by upcoming inflation data. He noted he might consider a rate hike if inflation data shows progress towards the 2% goal, acknowledging some signs of disinflation.
Egg prices have risen sharply, with 84 per cent of surveyed households reporting an increase in the past six months. Nearly half have reduced purchases, while over 70 per cent of consumers are concerned about egg adulteration amid rising food inflation.
India’s July economic indicators showed resilience driven by vehicle sales and credit, but persistent inflation, uneven consumption, and monsoon deficits threaten rural demand.
Fed Governor Michael Barr says the central bank should raise interest rates if inflation fails to cool towards its 2% target.
India hosts the Brics summit as the bloc gains global weight; inflation diverges across major economies, Tim Cook exits Apple, youth unemployment rises in South Asia and AI’s impact on jobs remains uneven.
Amid the external headwinds, the finance ministry highlighted that the domestic economy retained its vigour in August, with demand remaining strong and the external sector displaying stability.
Inflation remains a key risk. Consumer price inflation stood at 4.4% in July, while wholesale price inflation remained elevated at 9.8%, driven by mineral oils, food articles, metals, chemicals and fuels
Markets await insights from Kevin Warsh on ‘underlying inflation’ and key indicators that influence his monetary policy decisions. His previous comments suggest a cautious stance on rate increases, but specifics on measuring inflation remain unclear, adding to investor uncertainty.
Monetary Policy Committee (MPC) unanimously decides to maintain the policy repo rate with a focus on sustainable disinflation and economic growth.
