TDS Viral News: The US is the world’s largest economy. Whenever its central bank, the Federal Reserve (Fed), changes interest rates, its impact isn’t limited to the US, but impacts the entire global economy, including India.
What is the US Interest Rate? The interest rate is the rate at which banks lend money.
When the US interest rate: Increases → Money flows to the US, Decreases → Money flows to emerging countries (like India)
How does this directly impact India?Dollar vs Rupee – When interest rates rise in the US, foreign investors withdraw money from India and invest in the US.
This The dollar strengthens, The rupee weakens Result Imports become more expensive, and prices of petrol, diesel, and electronics may rise.
Why does the gold price change?
- US Interest Rate ↑ → Gold Price ↓
- US Interest Rate ↓ → Gold Price ↑
Because when interest rates are higher in the US, people leave gold and invest in banks and bonds.
Impact on the Indian Stock Market, Interest rate hike → Stock market decline
Interest rate drop → Market boom Specifically: IT, Banking, Real Estate, Sectors most affected.
What difference does it make to the common man? EMIs may become more expensive or cheaper, Buying goods from abroad may become more expensive, Mutual fund and SIP returns may change, Jobs and layoffs are also affected
What could happen in the future? US inflation and employment data determine whether the Fed will raise or lower interest rates.
If the US lowers interest rates, it is considered good news for India.
US Interest Rate Conclusion
Every small decision in the US economy impacts India’s finances, investments, and future planning. Therefore, ignoring US finance news can be detrimental even for the common man.
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