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  • 💰 Fed Holds, India’s Tariff Wildcard – What’s Next?

💰 Fed Holds, India’s Tariff Wildcard – What’s Next?

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Masala Chai
March 20, 2025

Happy Friday Junior! 🥳 We're almost at the weekend, so let's power through with today's hottest business, markets, and tech stories.

Excited Fun GIF by Bitrix24

Grab your chai, sip back, and let’s dive in! ☕

☕ Chai Shots

  • 📊 Fed Holds Rates Steady: The US Federal Reserve left interest rates unchanged at 4.25%-4.5%, while maintaining projections for two rate cuts in 2025 despite concerns over rising inflation due to new tariffs. More in the Big Brew!

  • ✈️ Air India & Air New Zealand Partnership: A new codeshare agreement is set to improve travel connectivity, with discussions on launching direct India-New Zealand flights by 2028.

  • 🛰️ Vodafone Idea’s Space Play: VIL is in exploratory talks with Starlink and other satellite providers to enhance telecom connectivity and expand 5G capabilities in India. The company aims to leverage satellite technology for rural broadband expansion, improved network coverage, and high-speed internet access in remote areas.

  • 🚖 Uber India’s Revenue Jumps 41%: Uber’s India unit reported a 41% surge in operating revenue to ₹3,762 crore in FY24, while narrowing losses by 71% to ₹89 crore. Growth in ride-hailing services and support operations drove the gains.

  • 🚗 Hyundai Hikes Prices: Hyundai Motor India will increase car prices by up to 3% from April 2025, citing rising raw material and operational costs. The hike will vary by model, following similar moves by Maruti Suzuki, Kia, and Tata Motors.

📈 Market Masala

  • 📊 Sensex, Nifty Extend Gains for 3rd Straight Session: The Sensex jumped 147.79 points to close at 75,449.05, while the Nifty gained 73.30 points to settle at 22,907.60. The rally was powered by FII buying, strong performances in consumer durables, realty, and capital goods, and anticipation of the US Fed’s policy decision.

  • 🚀 Midcap Stocks Outperform: Broader markets outshined the benchmarks, with the BSE Midcap index surging 2.28% and the Smallcap index jumping 2.17%. Realty, industrials, power, and services were the biggest gainers, while IT and FMCG saw some losses. The rally in metals came after the government imposed a tax on steel imports, boosting sentiment.

  • 🏗️ Ashok Leyland’s Big Move: The company inaugurated a new bus manufacturing plant near Vijayawada, set to produce 4,800 buses annually, including electric and diesel models.

  • 🍔 McDonald’s Expands in India: The fast-food giant is setting up its largest global capability center (GCC) outside the US in Hyderabad, aiming to hire 2,000 employees.

🌐 Global Masala

  • 📈 Wall Street Cheers Fed's Rate Cut Signal: The Dow Jones surged 383 points, with the S&P 500 and Nasdaq rising over 1%, as the Federal Reserve reaffirmed plans for two rate cuts in 2025. Investors reacted positively, even as trade tensions with Canada, Mexico, and China escalate. Fed Chair Jerome Powell reassured markets that inflation remains under control, though Trump’s tariffs could cause short-term price spikes.

  • 🤖 Musk’s xAI Joins $30B AI Fund: Elon Musk’s xAI is teaming up with Microsoft, BlackRock, and Abu Dhabi’s MGX to fund AI data centers and infrastructure.

  • 📡 XRP Soars 11%: The SEC dropped its appeal in the Ripple legal battle, leading to a massive 11% price surge for XRP (Crypto: Ripple), which now sits at $2.52.

  • 🇹🇷 Turkey’s Market Meltdown: The Turkish lira plummeted to a record low, and stocks dropped 7% after the surprise arrest of Istanbul’s mayor, a top Erdogan rival.

  • 🌍 European Markets Rally: Germany’s historic debt rule reform allows for higher defense and infrastructure spending, boosting investor sentiment.

  • 🌎 New Zealand Bounces Back: The Kiwi economy grew 0.7% in Q4, officially emerging from a technical recession. Strong international tourism and a revival in real estate and rental sectors helped fuel the growth.

  • 🇬🇧 UK’s Business Overhaul: The UK Labour government is set to cut business red tape by 25%, merge regulators, and fast-track project approvals to boost investment.

🍵 The Big Brew: Fed’s Balancing Act – Rate Cuts, Tariffs & India’s Shield

The US Federal Reserve is walking a tightrope—balancing inflation, economic growth, and Trump’s new tariffs. Here’s what went down:

  • 📉 No Rate Cut (Yet!) – The Fed kept interest rates at 4.25%-4.5%, but still plans two rate cuts later this year. Translation? Cheaper loans and easier borrowing ahead.

  • 🔥 Inflation Ticks Up – The Fed revised inflation expectations to 2.7% in 2025, up from 2.5% in December, thanks in part to Trump’s tariffs on imports. More expensive imports = higher prices for consumers.

  • 💼 Slower Growth Ahead? – The US economy is now projected to grow at 1.7% in 2025, down from 2.1% earlier. The Fed is signaling caution over trade disruptions and a potential slowdown in hiring.

  • 🇮🇳 India Stays Resilient – While the US economy wobbles, India is standing strong! Fitch projects 6.5% GDP growth in FY25-26, and thanks to lower reliance on exports, India is less exposed to Trump’s trade war.

  • 🤝 Tariff Negotiation on the Cards? – US Treasury Secretary Scott Bessent hinted at possible exemptions for India from Trump’s April 2 tariff hikes. If India secures a deal, inflationary pressures could ease, benefiting businesses and consumers alike.

  • 💡 What does this mean for you?

    • 📊 For investors: Market volatility ahead as tariff talks continue.

    • 🏭 For businesses: Exporters gain, but importers might face higher costs.

    • 💰 For consumers: Prices may rise slightly, but India’s domestic strength keeps inflation in check.

The key takeaway? India is playing it smart while the US economy braces for turbulence. 🍵

🚀 Startup Scoop

🎭 Chai Break Trivia

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🌟 What’s Brewing Next?

  • 🇺🇸 April 2: Trump’s reciprocal tariffs deadline—will India get an exemption?

That’s a wrap for today’s Masala Chai! Share this brew with your friends, and let’s keep the chai & chatter going! ☕🔥

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