RBI Plans Multiple Rate Cuts As Inflation Drops Below 4% Target

With inflation remaining below target, the Reserve Bank of India is expected to implement three consecutive policy repo rate cuts, beginning with a 25 basis points reduction in June, continuing an easing trend started earlier in the year. Meanwhile, in the UK, unemployment edged up to 4.5% and job vacancies declined, suggesting a gradual loosening of the labor market that supports cautious and gradual interest rate cuts by the Bank of England. Despite some policymakers like Alan Taylor advocating for more aggressive rate reductions due to economic weakness and trade uncertainties, others on the Bank's Monetary Policy Committee caution that persistent inflation, fueled by high wage growth, could limit the pace and extent of rate cuts. These differing perspectives highlight a balance between concerns over economic slowdown and inflation risks, with some members emphasizing the need for continued vigilance against inflationary pressures. In the U.S., economic experts, including Mohamed El-Erian, foresee fewer Federal Reserve rate cuts this year, suggesting a more restrained monetary policy approach amid evolving global trade conditions. Overall, central banks in major economies are navigating complex trade-offs between supporting growth and controlling inflation amid uncertain economic and geopolitical environments.