The US Federal Reserve is back in tightening mode—and for Indian investors, the key question is what this means for bond yields, the rupee and the RBI’s room to manoeuvre.
A renewed Fed tightening cycle could push US yields higher, strengthen the dollar and put pressure on emerging-market currencies. For India, that could translate into upward pressure on government bond yields, particularly at the longer end of the curve, while making the currency and global capital flows important variables to watch.
