Can US Fed hike rates aggressively this year? How a 50 bps rate increase could impact Indian stock market

US Federal Reserve rate hike expectations have softened after June US jobs data came in significantly below expectations, with nonfarm payrolls rising just 57,000 versus the projected 1,10,000 and April-May figures revised down by 74,000. However, with core inflation still at 2.9 percent and Fed Chair Kevin Warsh reiterating the 2 percent inflation target, experts believe a cumulative 50 basis point hike this year remains possible. Such an outcome could weigh on Indian equities by triggering further FPI outflows toward higher-yielding US bonds and pressuring the rupee.