US Federal Reserve raises rates after 3 years: Is RBI rate hike coming? October MPC meet in focus

The US Federal Reserve raised interest rates by 25 basis points to 3.75%-4%, the first hike since July 2023, with its dot plot signalling one more increase possible this year. Brokerages like Axis Capital and Choice Broking now expect the RBI to deliver rate hikes in the October and December 2026 MPC meetings, potentially pushing the repo rate towards 6.5%, though Brickwork Ratings expects the RBI to hold at 5.25%. The combination of the Fed move, a weakening rupee near 96 against the dollar, US 10-year yields breaching 5%, and Brent crude above USD 108 per barrel has intensified imported inflation concerns and complicated the RBI policy calculus.