A dovish tone from the us federal reserve chair jerome power’s count signal further Easing, potentially boosting investor confidence in emerging marks like India. , Photo Credit: Reuters/Elizabeth Frantz
Market participants are closely watching the outcome of the Us Fed’s policy meeting today, September 17, 2025. The domestic market has been buoyed by optimism over India-as bilateral trade talks, amid other global and domestic cues.
The Consensus Among Analysts Leans Towards a 25 Basis Point (BPS) Reduction, Thought some anticipate a more aggressive 50 bps cut. The expected rate cut is larger priced in, with investors focusing on the fed’s forward guidance. A dovish tone from the Us federal reserve Chair Jerome Powell’s Could Signal Further Easing, Potentially Boosting Investor Confidence in Emerging Markets Like India.
In addition to the rate cut, investors will pay attention to the tone towards us economy growth and inflation.
Inflation remains the key swing factor, according to asutosh mishra, head of research, ashika institutional equities, with tarifs posing the risk of a near-term flare -up. “The Labor Market Looks Steady But is Showing Early Cracks, Low UNEPLOYMENT PAIRED With Fewer Job Openings Points to Rising Recession Reissing. 4.4 per cent, the fed has meaningful room to ease if conditions deterirate, ”Mishra added.
Impact on Indian Stock Market
The Indian Equity Markets Have Shown Resilience in AnatiCipation of the Us Fed’s Decision. The Nifty 50 and BSE Sensex Have experience gains, driven by optimism over us trade talks and expectations of a rate cut.
Analysts sugges that a 25 bps cut may offer a modest boost to Indian equities by enhancing the yield differential between us and Indian assets. A 50 BPS CUT BURTER WIDEN This Gap, Making Indian Markets More Attractive to Foreign Investors.
A 25-50 BPS Rate Cut by the Fed is anticipated, driven by a softening us jobs market and rising UNEMPLOYMENT. “This would likely benefit the Indian market, as it would help reverse the ongoing outflow of fiis, who have been sold Indian rights since July 2025,” Vinjkar – Had of Resit Bolinjkar – Hadjkar Ventura, said.
According to Dr Vikas Gupta, CEO & Chief Investment Strategist at Omniscience Capital, A 25 BPS Rate Cut is Alrady Discounted in the Markets, Whereas a 50 bps cut couples some effect. A Dovish Tone Indicating Future Significant Rate Cuts Within Next 2-3 meetings is what the market would react to strongly positively, Gupta said.
On the sectorral front, vaibhav vidwani, research analyst at Bonanza, Said That The Export-Drive Sector, Particularly It Majors, Are Likely to Benefit Significly, As Easier user user user user police will support their capx in north America, which will strengthen their profitability.
Fii inflows
Analysts believe that a substantial rate cut by the us fed out round the trend, leading to renewed Fii Interest in Indian Markets. Favorable narrative in the meeting would begin strong and sustained Fii Flows into the Indian Markets.
According to Om Ghawalkar, Market Analyst, Share.Market, The Policy Adjustment Signals a Softer Us Dollar, Making Indian Assets More Atrocive Investors On A Relative Yield Basis. The Sustained Fii Inflows would strengthen the rupee and boost liquidity-sensitive sectors such and real estate.
The degree of inflows depends on the rate cut size and the fed’s guidance on future monetary policy. More aggressive cuts or a dovish tone enhance inflows, whereas cautious or hawkish signals may limit them, the bonanza analyst added.
Vinit bolinjkar of ventura also emphasized that the Indian stock valuations appear more reasonable, after a recent correction, due to recent gst reforms, benign information and a healthy monsoon season. The fed’s policy is an additional catalyst for renewed Fii inflows into the domestic market.
Noting that the India-as trade deal appears to be advancedly, gupta stressed that these facts combined would have a large impact on Fii Flows in the Near Term.
Published on September 17, 2025