Chetan Ahya highlights one data point that's more important for US Fed than GDP

“There is a trend which is showing that the job trends are coming down. We get bumps up in a month or so but on average job trends have been slowing. That is what matters for the Fed more than gross domestic product (GDP) growth,” he told CNBC-TV18.

Along a slowdown in the jobs growth, Ahya also expects US inflation to narrow sequentially from the second quarter and therefore, he sticks to his view of a rate cut by the Fed in June.

The US consumer price index (CPI) rose at 3.1% year-on-year (YoY) versus market expectation of 2.9%. The US producer price inflation, which is similar to the wholesale price inflation in India, rose by 0.3% month-on-month (MoM) versus market expectation of just 0.1%.

Ahya also shared his view on growing concerns over China's aggressive price cuts and expanding global market share globally, and the impact of these actions on emerging markets (EMs) like India.

He believes investors will have to be watchful of competitive and deflationary pressures that China will send to the rest of the world.

“From a sectoral perspective, China has already been deflationary for some of the large items, low value-added exports like durable goods, white goods but at the margin where we are seeing greater pressure is the new energy transition-related goods, which is electric vehicles (EVs), lithium batteries, solar panels and even old generation chips,” he said.

What this means for countries such as India, particularly in the case of a reelection of former US President Donald Trump, is the potential for an implementation of tariffs in the US. The projections are that the US could impose a 60% tariff on all imports from China, or a 10% tariff on all imports. Both of these scenarios will be negative for the region.

For the Reserve Bank of India (RBI) though, the headline inflation, particularly food, will remain the primary target for a rate decision, he stated.

Meanwhile, Sameer Goel, Global Head of Emerging Markets & APAC Research at Deutsche Bank, shared with CNBC-TV18, “We still think the Reserve Bank of India (RBI) will be in a place to potentially change its stance by April and maybe start cutting rates by June. We still think we will probably get about 100 basis points of rate cuts in FY25.”