Jahangir Aziz, Head, Emerging Market Economics at JP Morgan, praises the Indian government s budget consolidation efforts, with the fiscal deficit lower than expected at 5.1%. He emphasizes the need for fiscal consolidation to stabilize India s debt. Aziz believes that the RBI will wait for the Fed to cut rates before doing so itself, as interest rate differentials with the US are currently low. He anticipates that once interest rate differentials narrow, there will be significant portfolio flows into emerging markets, including India, due to low ownership and positioning of emerging market assets.
Central banks around the world are starting to signal a shift in monetary policy, hinting at potential interest rate cuts in 2024. This comes after months of aggressive tightening to combat rising inflation. Market projections suggest at least 100 basis points (bps) of cuts by the end of 2024 by the US Fed. The prospect of interest rate cuts has already begun to impact financial markets. Bond yields have fallen, while stock prices have rallied to record highs. So, will the party continue? What is in store for 2024? Will the US Fed fuel the market with rate cuts? Will India’s uneven recovery reveal a new risk? Listen to Jahangir Aziz, Head of Emerging Market Economics at JP Morgan as he shares insights with host Anupriya Nair in the latest episode of The Morning Brief podcast! Credits: CNBC Television 1, Bloomberg Television, The Economic Times 1, Yahoo Finance 1, CBC News, Daily Mail, NHK WORLD-JAPAN, The Economic Times 2, News9 Live, CNBC Television 2, Yahoo Finance 2
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