US Fed keeps rates unchanged as policymakers signal tighter policy ahead. What does it mean for Indian stock market?

The US Federal Reserve kept the federal funds rate unchanged at 3.50%-3.75% for the fourth consecutive meeting, but raised its year-end PCE inflation forecast to 3.6% from 2.7%. Nine of 18 policymakers now expect rates to rise this year, with six anticipating more than a quarter-point hike, signaling a hawkish shift. A potential US rate hike could trigger fresh FPI outflows from Indian equities, pressure the rupee, and weigh on markets already down 8% on the Nifty in 2026.