The question of US monetary policy

In contrast to the US, India is in the early stages of its inflation journey

Monetary policy in the US is an important factor influencing the Indian economy. Headline inflation in the US has reached 6.8 per cent, the highest value in 40 years, and well above the inflation target of 2 per cent. The US Fed faces a difficult choice. Three scenarios can be envisioned with different paths for the US short rate and for US monetary policy surprise.

Macro policy is often hesitant and late, as assessing conditions in the macroeconomy is difficult in real time. Two exceptions to this rule were the crisis of 2008 (when Lehman filed for bankruptcy in September