Capital XB executive director Ajitabh Bharti said the Fed’s lack of decisive
rate action points to political considerations; with US midterm elections
nearing, markets expect the Fed to prioritize stability over inflation control
in the short term. That dynamic could support emerging markets such as India: a
relatively weaker USD may ease rupee pressure and give capital flows and
external balances some breathing room. Bharti cautioned that if US inflation
persists or reaccelerates because policy action was delayed, the ensuing
correction could be sharper and more disruptive, transmitting volatility to
global markets including India.
