US Growth Remains Robust
On the US macro outlook and the Fed, Narayanan said, “US growth is still on very strong footing. GDP growth has been revised up, particularly from the consumer side. PCE numbers are high but stable, which is comforting.”
On rate cuts, he added, “We expect the Fed to deliver 25 basis points of cuts at the remaining meetings this year, followed by a gradual 50 basis points in the first half of next year. The Fed wants to get closer to neutral rates around 3-3.25%, which is more of a normalisation rather than urgent easing.”
Tariffs and Inflation: What to Watch
Regarding inflationary pressures from tariffs, Narayanan said, “We haven’t really seen the inflationary impact yet, as tariffs kicked in only in July and August. The Fed will watch inflation expectations more than temporary increases. If inflation is transitory, they will look through near-term rises.”
RBI Policy Outlook
On India’s central bank, Narayanan noted, “The RBI will likely pause for now. There are external headwinds like US tariffs and equity outflows, but domestic consumption remains strong. As long as global growth holds up, India should be supported, and the INR may be near its bottom, giving RBI room to wait.”
Global Growth Amid Tariff Uncertainty
On global growth concerns, he added, “US growth is driven by consumers, which is more sustainable. Despite tariff-related uncertainty, consumption hasn’t collapsed. Housing and commercial real estate are stable, monetary policy is easing gently, and inflation is under control. Near-term, global growth should remain supported, though uncertainties remain.”Conclusion
Narayanan highlights the resilience of US consumer-driven growth and its stabilizing effect on global markets. For India, domestic consumption and careful RBI policy management could support growth and market stability despite external headwinds.
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