INFLATION AND ECONOMIC GROWTH FORECAST
Why Donald Trump must let Jerome Powell do his job
Donald Trump's criticism of Jerome Powell raises concerns. This interference could destabilize the economy. GDP projections are down. Inflation and unemployment are rising. Powell is trying to navigate stagflation. Trump's tariffs could worsen the situation. The Fed needs to focus on policy. Powell needs space to do his job. Stability is essential for America.
India in a goldilocks situation, "nervous but exciting times" likely ahead, FinMin says in new report
Despite a brief surge in oil prices due to geopolitical tensions, India's macroeconomic health remains strong, characterised by subdued inflation and growth-supportive policies. While risks from potential oil supply disruptions persist, India is well-positioned to navigate global challenges. The government aims to further boost productivity through strategic missions and deregulation, fostering economic resilience and growth momentum.
US Stock Market Today: S&P 500 closes at 6,173, Nasdaq reaches 20,273 as markets show growth. Details here
The S&P 500 and Nasdaq closed at record highs on Friday. Despite concerns over tariffs and conflict in the Middle East, markets showed growth. Investors reacted positively to reduced tariffs and economic data.
Finmin pitches rating upgrade to S&P citing robust growth
India's finance ministry has advocated for a sovereign rating upgrade from S&P, highlighting the nation's robust growth prospects and strong macroeconomic indicators amidst global uncertainty. Officials emphasized easing inflation, an improving debt-to-GDP ratio, and a roadmap for further fiscal moderation. India's external sector performance remains strong, supported by adequate foreign exchange reserves and steady service exports.
US consumer spending falls unexpectedly in May
U.S. consumer spending unexpectedly declined in May, driven by the fading impact of pre-emptive purchases made in anticipation of tariffs. Inflation remained moderate, with the PCE Price Index increasing slightly. This combination of soft spending and inflation is unlikely to prompt the Federal Reserve to cut interest rates in July, as they assess the impact of tariffs on prices.
India's economy to hold top spot for growth, but underlying weaknesses remain: Poll
Economists predict a steady growth for the Indian economy in the current and next fiscal years, following a four-year low in 2024-25. While government capital expenditure remains strong, private sector spending lags, and job creation needs improvement. Uncertainties surrounding a potential trade agreement with the U.S. and the RBI's policy stance add complexity to the economic outlook.
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Top economist warns: US faces a crisis worse than recession — here’s what could be coming
Wall Street economist Torsten Sløk warns the US economy faces stagflation due to Trump's tariffs, potentially halving GDP growth to 1.2% this year. Inflation is expected to remain high, around 3% by the end of 2025, and unemployment is projected to increase, raising recession risks to 25% within the next 12 months.
Worse trade outcomes possible if uncertainty spreads globally, warns WTO
The WTO's Goods Trade Barometer indicates a strong start to global goods trade in early 2025, driven by importers anticipating tariff hikes. While the barometer rose to 103.5, a decline in new export orders to 97.9 suggests potential weakening in trade growth later in the year. The WTO anticipates stable merchandise trade growth of 2.
Icra retains FY26 GDP forecast at 6.2%
Icra has retained India's GDP growth forecast for FY26 at 6.2%, contingent on favorable monsoons and stable crude oil prices. While urban consumption prospects are positive, geopolitical tensions and volatile financial markets pose downside risks. CPI inflation is projected to cool to 3.5%, potentially leading to a rate cut in October 2025, despite a likely pause in August.
S&P raises India growth forecast for FY26 to 6.5%
S&P Global Ratings increased India's GDP growth forecast to 6.5 percent. This is due to lower crude prices and normal monsoon. Geopolitical tensions are unlikely to significantly impact the rupee or inflation. Global economy faces rising risks from Middle East turbulence. Domestic demand resilience will limit economic slowdown. India's GDP growth is projected at 6.7 percent for fiscal year 2027.
Why S&P Global thinks Indian economy will withstand West Asia turmoil
S&P Global Ratings predicts India's economy will withstand West Asia's unrest, citing lower global energy prices as a buffer against currency and inflation pressures.
US migrant halt may wipe potential job growth
Slowing immigration and an aging workforce are creating a potential labor crunch in the U.S., potentially reducing payroll growth significantly. Barclays estimates this could slow economic growth to 1.4-1.6% next year. This situation complicates the Federal Reserve's policy decisions, as worker shortages could fuel inflation despite an economic slowdown, potentially leading to a cautious approach to interest rate cuts.
Impact of India's large rate cut may be limited, says RBI MPC member Saugata Bhattacharya
Saugata Bhattacharya suggests the recent RBI rate cut may have a limited immediate impact. He emphasizes the importance of transmission to MSMEs and home loan borrowers. Inflation is expected to align with the RBI's target. Bhattacharya prefers a gradual easing path. He wants to assess the effects of government policies on demand.
Despite global turmoil, inflation to stay below 4% target: MPC member
MPC member Ram Singh anticipates India's CPI inflation to remain below 4% despite geopolitical risks impacting oil and fertilizer prices. The RBI's shift to a neutral stance and substantial forex reserves offer a buffer against external pressures.
India's business activity surges in June on strong demand, record export orders, PMI shows
India’s private sector activity surged in June, reaching a 14-month high, driven by strong domestic and international demand, record export growth, and robust hiring, according to the HSBC Flash India Composite PMI. The index rose to 61.0 from May’s 59.3, marking nearly four years of continuous expansion.
Indian rupee, bonds under pressure as US strike on Iran deepens Middle East conflict
The Indian rupee and government bonds may weaken this week. This follows a United States strike on Iran. Concerns rise about higher oil prices and conflict. The rupee closed at 86.5850 against the U.S. dollar on Friday. Analysts anticipate oil prices to increase by $3 to $5 per barrel. The Reserve Bank of India may intervene to curb volatility.
India bonds to fall as oil spike fears heighten after US attacks Iran
Indian government bond prices are anticipated to decline due to rising oil prices spurred by U.S. strikes on Iran. The benchmark 10-year bond yield is expected to rise, influenced by Brent crude jumping above $80 a barrel.
Will rising inflation in May force the Fed to change its strategy?
US inflation likely edged up slightly in May, offering limited insight into tariff impacts. Jerome Powell will testify on Capitol Hill, reiterating the Fed's cautious approach amid uncertainty about trade policy's economic effects. While rate cuts remain possible, officials seek more clarity. The report will also provide insights into household spending, personal income, and consumer confidence.
US strikes at a fragile moment for global economy
US strikes on Iranian nuclear facilities inject uncertainty into a weakening global economy. Downgraded growth forecasts from major financial institutions are now threatened by potential oil price surges and trade disruptions stemming from escalating conflict. Analysts anticipate further escalation and rising inflation, compounded by looming tariff deadlines, posing significant economic risks.
US strikes on Iran come at fragile moment for the global economy
US strikes on Iran's nuclear facilities have rattled the global economy, prompting fears of escalating conflict and surging oil prices. Experts warn that Iran's response could involve attacks on US assets, energy infrastructure, or closure of the Strait of Hormuz, potentially driving crude oil past $130 a barrel.
RBI Governor pushes for growth-backed policies as global uncertainty clouds India's investment outlook: MPC minutes
RBI Governor Sanjay Malhotra cautioned that rising global uncertainty could postpone business investment decisions. He noted that post-COVID recovery has been driven by public investments, with private sector investment remaining weak despite favorable conditions. Malhotra emphasized the necessity of implementing policies that actively support economic growth in the face of these challenges.
Tax hikes put UK budget deficit on track against official forecasts
UK's budget deficit is slightly below forecasts due to a surge in business taxes, offering some relief to Finance Minister Rachel Reeves. While borrowing in the initial months of 2025/26 is less than predicted, economic uncertainties like Middle East conflicts and trade wars still pose significant risks.
Indian Banks' earnings growth forecast halved amid economic caution and high deposit costs
Indian banks are facing a significant slowdown in earnings growth, potentially halving to 6.5% in FY26 due to a cautious economy and reduced core profits. Muted credit demand, high deposit costs, and RBI's measures to control unsecured lending contribute to this deceleration. However, a rebound to 16.1% is expected in FY27 with anticipated rate cuts and improved demand.
Peter Schiff sounds alarm: America faces economic doom as Fed powerless against hyperinflation threat
Economist Peter Schiff has warned of a bleak economic outlook for the US, criticizing the Federal Reserve's decision to hold interest rates steady. Schiff predicts higher inflation and a weaker economy than the Fed anticipates, suggesting the US is headed for stagflation and potentially runaway inflation.
Bank of England keeps rates steady, sees further loosening as jobs market weakens
The Bank of England maintained interest rates at 4.25%, amidst concerns over a softening labour market and rising energy prices due to Middle East tensions. While a Reuters poll anticipated a 7-2 vote to hold, the Monetary Policy Committee decided 6-3. Governor Andrew Bailey indicated a gradual downward path for rates, emphasizing unpredictability and vigilance towards inflation.
IT stocks slip up to 3.5% after Fed holds rates, flags persistent inflation
Indian IT stocks fell after the US Federal Reserve kept rates unchanged and signaled a cautious stance on future cuts, with projections showing just 50 bps in 2025 and 25 bps in 2026. Stocks like LTIMindtree and Tech Mahindra dropped sharply. Fed Chair Powell flagged persistent inflation risks, while Trump renewed pressure for aggressive rate cuts.
Fed holds key rates again, still sees two cuts by year-end
The Federal Reserve maintained interest rates. Officials anticipate two rate cuts next year. Economic uncertainty persists, though it has lessened. Growth estimates are lowered, while unemployment and inflation forecasts are raised. Seven officials now foresee no rate cuts this year. Investors await insights from Fed Chair Jerome Powell on Trump's policies and potential rate adjustments.
US Fed meeting June 2025: Top highlights, key takeaways, rate projections, and inflation forecasts
US Fed meeting June 2025 took center stage as the Federal Reserve held interest rates steady at 4.25%–4.5% for the fourth straight time, resisting strong pressure from President Donald Trump. Despite rising inflation and slower GDP growth forecasts, Fed officials still see room for two rate cuts later in 2025. The central bank’s updated projections show inflation climbing to 3%, GDP dropping to 1.4%, and unemployment expected to hit 4.5%. Chair Jerome Powell faced sharp criticism from Trump but remained firm. Here we have all the top highlights, key takeaways, inflation forecasts, and interest rate projections you need to know.
Fed to hold rates steady again as officials wait for more clarity on economy
All eyes are on the Federal Reserve's upcoming decision on interest rates. Experts anticipate the Fed will likely hold rates steady. Updated economic projections will be released. These projections will offer insights into future growth, inflation, and unemployment. Fed Chair Jerome Powell will address the press. Market watchers are keen to understand the Fed's strategy amidst economic uncertainty.
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