Core Insights - The Reserve Bank of India's Monetary Policy Committee (MPC) will announce decisions from its first meeting of 2026, focusing on interest rates, inflation targets, and growth projections [1] - The MPC is expected to maintain the current repo rate amid global economic uncertainty and domestic currency volatility [3] Meeting Schedule - The bi-monthly MPC meeting is set for February 4 to February 6, 2026, with the policy outcome announced at 10:00 a.m. IST on February 6, followed by a press conference at 12:00 noon IST [2] Economic Projections - The RBI has revised its GDP growth rate projection for FY26 to 7.3%, an increase of 50 basis points from previous estimates, while inflation is projected at 2% for FY26 [4] - The Economic Survey 2025-26 forecasts India's real GDP growth at 7.4% for FY26 and between 6.8% to 7.2% for FY27 [4] Recent Rate Changes - In 2025, the RBI implemented several rate cuts: 25 basis points in February, April, and December, and 50 basis points in June, maintaining a neutral stance throughout the year [5]

As the EUR/USD tests the 1.1850–1.2000 resistance zone, all eyes are on today’s ECB meeting. Traders are looking for clarity in a situation defined by cooling eurozone inflation and a surge in Euro strength. Read our previous article Can Lagarde Push the EUR/USD Higher? (Part 1) to get insights into the eurozone inflation and growth dynamics. The EUR/USD Dynamics: Geopolitics, Fed Uncertainty, and the Path to 1.20 The Dollar’s Turbulent January After having gained around 13.50% in 2025, the EUR/USD cu ...

LONDON (AP) — The Bank of England kept its main interest rate unchanged at 3.75% on Thursday with U.K. inflation remaining above target and economic growth is showing signs of picking up. The decision was widely anticipated in financial markets but the split on the nine-member rate-setting panel was much closer than expected. Five members of the Monetary Policy Committee opted to keep rates unchanged while four voted for a quarter-point cut. The central bank, which sets interest rates for the whole of t ...

The Monetary Policy Committee (MPC) of the Reserve Bank of India is likely to maintain a status quo on the repo rate in its policy announcement scheduled for Friday, amid continued global economic uncertainty, pressure on government bond yields and volatility in the domestic currency, according to a report by State Bank of India.The report stated that, despite earlier policy-rate easing, the central bank will hold rates this time, as several macroeconomic and global factors continue to pose challenges. It n ...

Market Overview - The market rally of 2025 saw the S&P 500 increase by approximately 18% by the end of the year, although this rally was initially concentrated before broadening late in the year [4] - Current corporate valuations, including price-to-earnings ratios, are considered stretched, with the S&P 500's trailing twelve-month P/E ratio estimated at around 26, significantly higher than its historical average of approximately 16.1 [5] - The S&P 500 market capitalization is currently close to 200% of GDP, marking an unprecedented high [8] Federal Reserve's Impact - The Federal Reserve's decisions on interest rate cuts are pivotal for market direction, with two scenarios outlined: cutting "because they can" may support market performance, while cutting "because they should" could indicate economic weakness and negatively impact equities [12][15] - Historical trends suggest that equities may initially rise after the first Fed rate cut, but this is contingent on economic data, particularly inflation rates [12] Macroeconomic Risks - Key macroeconomic risks include Treasury funding, the Fed's balance sheet, and bond market volatility, which could signal shifts in liquidity affecting market valuations [16] - Persistent inflation remains a significant concern, with inflation rates above target in most countries, which could impact market stability [19] AI's Potential - The promise of artificial intelligence (AI) presents a potential upside for the market, with the possibility of a productivity boom that could drive earnings estimates higher [17][18] - If AI benefits are realized broadly, they could serve as a fundamental justification for current and potentially higher valuations in the equity market [18]

The report stated that, despite earlier policy-rate easing, the central bank will hold rates this time, as several macroeconomic and global factors continue to pose challenges.It noted that government bond yields have shown persistent hardening in recent periods, even after policy rate easing.According to the report, the effectiveness of This, it said, could limit the transmission of monetary policy actions, so Live EventsYou Might Also Like:Government borrowing will be the decider factor in whether MPC ca ...

Group 1 - Jerome Powell's term ends on May 15, and President Trump has nominated Kevin Warsh, who is expected to be confirmed easily by Congress [1] - Warsh is historically viewed as a hawk, having criticized quantitative easing and low rates aimed at stimulating the economy [1] - Goldman Sachs suggests that a Fed led by Warsh may not necessarily keep rates higher, indicating that interest rate cuts and quantitative easing remain possible [2] Group 2 - Wall Street expresses concern that under Warsh, the Fed may not cut rates as aggressively [3] - The Fed's monetary policy is influenced by a dual mandate, which aims to balance unemployment and inflation, often leading to conflicting goals [4] - Goldman Sachs believes that Warsh's views on inflation and artificial intelligence as a deflationary force may lead to rate cuts, with expectations of two reductions in 2026 [6]

Economic Outlook - Analysts from Bank of America expect the European Central Bank (ECB) to hold rates, emphasizing higher uncertainty with only minor communication tweaks [1][4] - The British pound remained flat at $1.3650 ahead of the Bank of England's policy decision, which is also expected to keep rates on hold [1][4] - The U.S. dollar index increased by 0.2% to 96.671, trading near a two-week high, as financial markets assess the U.S. corporate earnings season [4] Market Performance - The Nasdaq Composite fell by 2.9% over two days, marking its largest decline since October, driven by volatility from major companies like Alphabet and a downturn in software stocks [2][4] - Federal Reserve Governor Lisa Cook expressed concerns about inflation rather than the labor market, indicating a reluctance to support further interest rate cuts until inflation pressures ease [2][5] Currency Movements - The U.S. dollar slipped 0.1% to 6.9386 yuan against the Chinese yuan following discussions between U.S. President Trump and Chinese President Xi Jinping regarding trade and security [3][5] - The Australian dollar rose by 0.1% to $0.70045 after trade balance data exceeded market expectations, while the New Zealand dollar also gained 0.1% to $0.60045 [3][5] Cryptocurrency Trends - Cryptocurrencies stabilized after a significant selloff, with Bitcoin rising by 0.2% to $72,745.23 and Ether increasing by 1% to $2,146.63 [5]

Core Message - Treasury Secretary Scott Bessent emphasized the need for patience regarding the administration's tariffs, asserting that they will eventually lead to the re-industrialization of the U.S. economy [1][6] Economic Impact - The short-term economic outlook depends on whether tariffs minimally impact inflation and effectively promote U.S. manufacturing [2] - Since the implementation of tariffs, the U.S. has lost 72,000 manufacturing jobs, indicating that the tariffs have not yet achieved the desired manufacturing revival [4] - Despite the job losses, the economy has shown resilience, with growth continuing and inflation remaining above 2% without surging, contrary to initial recession predictions [5] Manufacturing Response - Bessent reported that numerous factories have begun construction in response to the tariffs, which aim to favor domestic manufacturing over imports, although these factories will take time to become operational [3][6] - Business leaders have expressed concerns about hiring and expansion due to tariff-related uncertainties, with many manufacturers reporting that import taxes have complicated long-term planning [5]

Core Viewpoint - Federal Reserve governor Lisa Cook perceives elevated inflation as a greater threat to the economy compared to a weakening labor market, indicating potential skepticism towards rate cuts [1] Summary by Relevant Categories Economic Threats - Elevated inflation is viewed as a significant risk to the economy [1] - The weakening labor market is considered less of a concern in comparison [1] Monetary Policy Implications - Cook's stance suggests she may not support a return to rate cuts in the near future [1]