Central banks in advanced economies have started cutting rates without a clear rationale, indicating a tentative approach to monetary easing. In contrast, the Fed remains hawkish, projecting only one rate cut in 2024, down from three in March. Domestically, India’s economy grew robustly, achieving 7.8% in Q4 FY24 and 8.2% for FY24, driven by strong public sector investments. Improved rural demand due to a good monsoon and lower inflation could support growth in FY25, provided there is a sustained recovery in the labour market. While inflation is easing with moderation in core components, persistently high food inflation remains a concern. Given still high food price inflation and with the timeline for rate cuts in the US being pushed back to September, the possibility of the RBI opting for a rate cut earlier than that seems highly unlikely. However, significant rate cuts may be limited due to rising inflationary pressures in the second half of FY25.