Fed's "Hawkish" Rate Cut: India's Markets & Rupee Impact

• US Federal Reserve cut interest rates by 0.25%, setting the federal funds rate at 3.5%-3.75%, a three-year low and the third consecutive cut this year.
• Despite the rate cut, the Fed maintained a "hawkish" stance and announced it would buy $40 billion in Treasury bills to boost market liquidity.
• The Fed increased its 2026 GDP growth forecast to 2.3% but anticipates inflation will stay above its 2% target until 2028.
• These decisions could heighten global market volatility, potentially disappointing equity investors and pressuring tech stocks due to high US bond yields.
• For India, sustained high US rates might cause FII outflows and market volatility, though India's strong economy and controlled inflation could provide stability. RBI is expected to remain cautious.

Why It Matters: US Fed rate cut impacts India's markets and investments.