US Fed’s dual challenge: Will rising inflation and soaring bond yields force Warsh into first rate hike in 3 years?

The US Federal Reserve is expected to increase its policy rate by 25 basis points, as inflation stays high and oil prices remain above $100 a barrel. Such a hike could lift Treasury yields and affect global equity markets, including capital flows to India.

Key Takeaways

• Fed expected to raise rates by 25 basis points
• Inflation remains elevated and oil prices above $100 a barrel
• Higher rates could push Treasury yields up
• Could pressure global equity valuations and foreign flows to emerging markets like India