The US Fed is scheduled to meet today. What remains to be seen is whether the tone will be hawkish or mild. However, Peter Morgan, Chief Economist of the Asia Pacific Region, HSBC, says he doesn’t expect the Fed to touch rates, but advises to watch out for the Fed’s language.

Though, he says, one of the key developments that the Fed could use to suggest the outcome would be the improvement in the core PCE (personal consumption expenditure) deflator, that recently came down to just 3.1%, YoY.

This, he says, suggests US inflation creeping back into the comfort zone. Starting September, he expects three Fed rate-cuts this year, the reasons for which could be slower growth and lower inflation.

David Cohen, Director, Action Economics also maintains the view that the Fed will not spring any surprises, with little change in the policy statement. Instead, he thinks, the Fed is likely to reiterate that inflation is the predominant concern. The most likely scenario would be for the Fed to remain steady. He says, "The economy is enjoying a soft landing, growth is likely to pick up, I would expect the Fed to be satisfied with remaining on hold."

Sharada Selvanathan, Currency Strategist at BNP Paribas holds a similar view. She expects the Fed to cut rates this year, however, not in the near term. Inflation is still too high for it to cut rates.

At home too, the RBI kept all the rates - CRR, reverse and repo, unchanged during the Credit Policy announcement last month. Though, even as the RBI remained hawkish on the economy, the Governor, YV Reddy, hinting at a probable rate hike, if need be, said, “The monetary policy stance continues, the vigil continues, there are no fresh measures but all options are kept open."