FOMC meeting November 2024: Further rate cuts? What will Jerome Powell's decision mean for India?

The US Federal Open Market Committee (FOMC) is set to meet on Wednesday and is expected to make an announcement regarding federal rate changes on Thursday. The November 2024 FOMC Meet headed by Fed chair Jerome Powell is crucial given that it coincides with the election frenzy surrounding the US Presidential Polls 2024. In its previous meeting, the FOMC had cut rates by 50 basis points. 

FOMC meeting November 2024 date and time

The FOMC November 2024 meeting will take place today, on November 6 and tomorrow, November 7. Fed chair Jerome Powell is expected to announce the outcome of the meeting on Thursday, November 7. The announcement is likely by 11.30 pm on November 7.

FOMC Meeting November 2024: What will a rate cut mean for Indian Markets?

Will the US Fed cut rates further? How will the Indian markets react to the US Fed's rate revision, if any? Market watchers and analysts are speculating a 25 bps rate cut by the FOMC on Thursday. Market participants are of the view that a 25 bps rate cut by the Federal Reserve on November 7 could potentially 'spur' foreign inflows into emerging markets such as India further adding volatility to Indian equity markets.

Lower cost of borrowing for companies and customers

Whenever the US slashes the interest rate, the RBI follows suit. A lower interest rate simply means a lower cost of borrowing for companies, which incentivises them to take up more money from the bank and more investment in the economy. A rate cut in the US Fed means depreciation of the Dollar in value, which in turn implies appreciation of the Rupee . A Greater appreciation of the Rupee means one can import more and export becomes costlier, that is, the vendor will get more money for the same goods. The impact on import and export will have an impact on crude oil. 

Will there be good news for the Indian Stock Market ?

As a thumb rule, when rates go down, borrowing becomes cheaper for companies. This might mean good news for the India stock market, analysts believe. With greater cash flow available to the companies, they can increase their investment abroad. A positive investor sentiment may have a positive impact on the stock market. While all the factors are in India’s favour, too much money supply, and excessive borrowing, can lead to inflation.