The Federal Reserve is expected to lower interest rates soon due to declining core inflation, particularly in the service sector, and a weakening labour market. Further, the recent withdrawal of President Biden from the presidential race provides the Fed with more flexibility to implement rate cuts if deemed necessary. India’s economic growth likely remained steady in Q1 FY25 and the macro-outlook continues to be a favourable one. Economic growth is expected to gain support from the expectation of revival in rural demand owing to the prediction of above-normal rainfall. Headline inflation edged up to a four-month high as food prices continue to exert upward pressure. Amidst persistently elevated food inflation and sustained growth momentum we retain our view of no rate cuts prior to Q3 FY25.