The United States has imposed steep tariffs on imports, including a 26 per cent duty on Indian goods
China and others have retaliated, raising fears of a global trade war with uncertain outcomes
Equity markets have declined sharply
Bond yields and crude prices are falling, hinting at rising fears of a US recession and expectations of interest rate cuts by the Federal Reserve
Higher tariffs could push up costs and consumer prices in the US. The risk of stagflation is growing, complicating global monetary policy responses
India may face lower growth as exports weaken. Despite softer oil prices, the domestic fuel duty hike limits relief. Export competitiveness is also under pressure
With inflation near target, the MPC may consider a 25-basis-point cut. But given global uncertainties, it must avoid overcommitting to stimulus
Markets await RBI’s decision and commentary. Revised inflation or growth projections could shape expectations. Caution and clarity will be key