Is the US heading towards recession? What RBI Governor Shaktikanta Das said | Economy & Policy News
Mumbai: Reserve Bank of India Governor Shaktikanta Das addresses during the 188th AGM of Bombay Chamber Of Commerce & Industry, in Mumbai, Tuesday, June 25, 2024. (Photo: PTI)
Reserve Bank of India Governor Shaktikanta Das on Thursday said it’s premature to talk about a recession in the United States, adding that the central bank will make its decisions based on the incoming domestic and international data.
According to Reuters, there is a possibility that the RBI might choose to cut rates in October. This decision could be partly influenced by the potential rate cut move by the US Federal (RBI equivalent in the US) in its September meeting.
What’s happening in the US economy?
Following the release of weaker-than-expected jobs data for July in the US, the US Fed on Monday dispelled the speculation that the economy is in a recessionary freefall. However, it said rate cut could be on cards to avoid such a situation. When central banks make lending rates cheaper, commercial banks are able to offer certain loans at a lower interest rate to the consumers, thereby increasing the cash flow in the market.
On the US economy, San Francisco Fed President Mary Daly said on Monday that the US is “not falling off a cliff” adding that the decision-makers are “quite open” to adjusting the policy rate in coming meetings, based on the economic data.
Manoranjan Sharma, chief economist of Infomerics Ratings, believes that this development could have a spill-over effect, including “inducing central bankers to move to a less restrictive policy.”
In last week’s meeting, the US Fed announced to keep its benchmark lending rate unchanged at 5.25-5.50 per cent range.
First Published: Aug 08 2024 | 3:20 PM IST
