Archive · 17 Sep 2026
Economists See More Fed Hikes, Shallower RBI Rate Cycle
Economists are comparing what the US and India might do with interest rates.
They think the US Federal Reserve could raise rates up to four times.
They think India’s Reserve Bank may raise rates fewer times or by a smaller amount.
Higher oil prices could make inflation worse.
Inflation means prices for things people buy are rising.
The economists also discussed whether foreign investors may put money into Indian debt.
They considered how these changes could affect the Indian rupee.
The article presents these as possible outcomes, not certain predictions.
Economists said the US Federal Reserve could raise interest rates as many as four times.
They said the Reserve Bank of India may keep its rate-hike cycle relatively shallow.
Neeraj Gambhir and Aastha Gudwani discussed the Reserve Bank of India’s policy flexibility.
The discussion included risks that crude oil prices could push inflation higher.
They also examined foreign portfolio investment debt flows and the outlook for the Indian rupee.
- Who
- Neeraj Gambhir of Axis Bank and Aastha Gudwani of Barclays discussed the outlook.
- What
- The economists assessed possible Federal Reserve rate increases and a shallower Reserve Bank of India rate cycle.
- Why
- They discussed policy flexibility, crude-linked inflation risks, foreign portfolio investment debt flows, and the rupee outlook.
Potentially More Fed Tightening
Potentially Shallower RBI Tightening
Interest-rate paths
Potentially More Fed Tightening
The US Federal Reserve could raise interest rates up to four times, according to the economists’ assessment.
Potentially Shallower RBI Tightening
The Reserve Bank of India may retain flexibility and follow a relatively shallow rate cycle.
Policy considerations
Potentially More Fed Tightening
The US outlook centers on the possibility of repeated rate increases.
Potentially Shallower RBI Tightening
India’s outlook includes managing crude-linked inflation risks while avoiding a deeper rate cycle.
- Federal Reserve outlook
- The Federal Reserve could raise rates up to four times.
- Reserve Bank of India outlook
- The Reserve Bank of India may keep its rate cycle shallow.
- Axis Bank participant
- Neeraj Gambhir is Group Executive and Head-Treasury, Markets & Wholesale Banking Products at Axis Bank.
- Barclays participant
- Aastha Gudwani is India Chief Economist at Barclays.
- Inflation risk
- Crude oil prices were identified as a potential source of inflation risk.
- Other topics
- The discussion covered foreign portfolio investment debt flows and the rupee outlook.