Lack of Fed Rate Action Benefits Emerging Markets in Short Term -- Market Talk
Dow Jones2026/07/30 03:260326 GMT - The absence of decisive rate action by the Federal Reserve suggests a possible element of political calibration, says Ajitabh Bharti, executive director at Capital XB. With the U.S. midterm elections approaching, there is a perception that the Fed is prioritizing stability over inflation control in the near term, he says in a note. This dynamic could favor emerging markets like India in the short term. "A relatively weaker dollar could ease pressure on the rupee and provide some breathing room for capital flows and external balances," he says. However, if inflation in the U.S. persists or reaccelerates due to delayed policy action, the eventual correction could be sharper and more disruptive, transmitting volatility across global markets, including India, he adds. (monica.gupta@wsj.com)
(END) Dow Jones Newswires
July 29, 2026 23:26 ET (03:26 GMT)
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