India may see 50 bps of rate hikes in 2026 as Fed tightens: Analyst
The Federal Reserve's rate decisions are likely to constrain the RBI's monetary policy flexibility, according to Garima Kapoor of Elara Securities. Narrowing India-US bond yield differentials could compel the central bank to raise rates by 25 to 50 basis points in 2026.
Higher US yields and a stronger dollar pose additional headwinds for Indian markets. Kapoor flagged potential pressure on foreign portfolio investor flows as external conditions tighten, affecting capital inflows into Indian equities.
