The details of the meeting, at which the U.S. central bank voted to raise interest rates, also showed that several officials wanted to announce a start to the process of reducing the Fed's large portfolio of Treasury bonds and mortgage-backed securities by the end of August but others wanted to wait until later in the year.
The revised inflation trajectory which is appreciably lower than the earlier assessment made in April 2017 coupled with the less hawkish tone of the policy statement seem to suggest a possibility of rate cut in the coming quarters.
The meeting assumes significance as it will be the first after promulgation of the ordinance amending the Banking Regulation Act, 1949, last month.
State Bank of India, on May 8, 2017, announced a steep reduction in its affordable home loan rates by up to 25 basis points, with the lowest rate of 8.35 per cent for new R
According to the ratings agency, there could be a shift in the type of instruments issued for the purpose of raising capital in the sector largely to the capital market instruments like bonds, from the conventional term loans.
Talking to reporters in Australia, St. Louis Federal Reserve President James Bullard said opinions differed within the Fed on ending its balance sheet reinvestment policy and it would take some time to agree on, but he felt it could start later in the year.
"For 2017-18, inflation is projected to average 4.5 per cent in the first half of the year and 5 per cent in the second half," said the RBI's first bi-monthly monetary policy statement for 2017-18.
Rising interest rate in the US provides sufficient indication that benchmark policy rate of the Reserve Bank of India is not going to go down but may increase in the future depending on domestic and external factors, experts said.
Hardening inflation and global developments may prompt the Reserve Bank to opt for status quo at its first bi-monthly monetary policy for 2017-18 on Thursday.
A favourable demand-supply balance of G-secs by increasing demand through reducing their supply and also lowering downward rigidity on operative overnight rates, RBI can ensure better transmission and help government save Rs 10,000 crore annually on interest cost, says a report.
Feels that FIIs waited for key events to pan out for the market and their current investment of USD 2 billion in a week was a serious commitment. But, for an investor, the situation looks a little murky as the market has seen no earnings growth for the past few years.
"Indian markets (are) well placed to absorb the US Fed rate hike. Gradual approach in future increases augurs well for emerging markets," Economic Affairs Secretary Shaktikanta Das tweeted.
The Fed increased the interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent on strong macroeconomic data and confidence in inflation which is rising to central bank’s target.
The ball is now in Trump’s court as market waits to see his Congress take the responsibility for providing economic stimulus
There is another important pattern which traders should not overlook which is ‘inside bar’ or insider candle. Inside bar is a two-candlestick pattern in which the inside bar is smaller or within the range of prior bar.
Gold prices steadied on Tuesday as expectations for an interest rate rise by the US Federal Reserve boosted the dollar, while political risks in Europe kept losses in check by boosting the metal's safe-haven appeal.
On the face of it, Wednesday's expected interest rate hike by the Federal Reserve would be a clear sign that the United States has emerged from the shadow of the global financial crisis, a decade after it began.
The focus is to look at companies that have the potential to grow significant cash flows over the medium to long-term, say 5-10 years, says Jeff Chowdhry, Senior Portfolio Manager, LGM Investments.
These moves would strengthen the dollar against other currencies, putting downward pressure on the euro, said Sri-Kumar, president of Sri-Kumar Global Strategies.
Since the start of the year, most Asian currencies have risen against the dollar, as uncertainty about President Donald Trump's economic policies hurt the greenback.
The speech marks a shift from the cautious, dovish tone that Brainard has used in many of her recent speeches, and adds an important voice to the chorus of officials signaling rates may rise when the Fed next meets in mid-March.
The increase in prices, which was fastest in nearly three and half years and was triggered by higher raw material costs, also spoiled the case for any immediate interest rate cut by the Reserve Bank and supported the recent shift in its monetary policy stance from 'accommodative' to 'neutral'.
Four Fed presidents spoke Tuesday, and all indicated an interest rate hike could be considered in March. "All are on the same page, including hawks and doves, and especially Dudley," said Tom Simons, money market economist at Jefferies.