A 25-50 bps rate cut by the Fed is anticipated, driven by a softening US jobs market and rising unemployment. “This would likely benefit the Indian market, as it could help reverse the ongoing outflow of FIIs, who have been actively selling Indian equities since July 2025,” Vinit Bolinjkar – Head of Research – Ventura, said.
According to Dr Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital, a 25 bps rate cut is already discounted in the markets, whereas a 50 bps cut could still have some effect. A dovish tone indicating future significant rate cuts within next 2-3 meetings is what the market would react to strongly positively, Gupta said.
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