Uday Kotak’s warning! Brace for global turbulence, China imploding & why he believes interest rates will remain higher for some time – Times of India

Billionaire banker Uday Kotak foresees a turbulent road ahead for the global economy. Kotak, the founder of Kotak Mahindra Bank, has warned about higher-than-expected US inflation which may delay the US Federal Reserve rate cuts and keep interest rates elevated, impacting India as well.
He has also highlighted concerns about China’s economic challenges.Kotak believes that the US rate cut could be postponed until closer to the Presidential elections, with Brent crude prices hitting $90 and inflation levels exceeding expectations.
Taking to X (formerly Twitter), Uday Kotak posted, “US inflation is higher than expected. Postpones US rate cuts to later, closer to US Presidential elections, if at all. Brent oil now $90. Will keep rates higher for longer worldwide including India. Only wild card: China imploding economically. Get ready for global turbulence.”
Recent US Federal Reserve meeting minutes indicated a pause in interest rate hikes, with officials considering gradual policy easing if the economy progresses as anticipated. The focus remains on achieving a stable 2 percent inflation rate before any rate adjustments.

US inflation spiked by 3.5 percent in March, surpassing expectations and marking a six-month high. Brent crude prices crossed $90 per barrel, while US crude futures rose above $86.24 per barrel.
Morgan Stanley raised its Brent crude price forecast for the third quarter by $4 to $94, citing geopolitical risks.
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In India, the Reserve Bank of India maintained the repo rate at 6.5%, aligning with inflation and growth forecasts. RBI Governor Shaktikanta Das in the April 5 Monetary Policy Meet (MPC) said, “Looking ahead, robust growth prospects provide the policy space to remain focused on inflation and ensure its descent to the target of 4.0 per cent. As the uncertainties in food prices continue to pose challenges, the MPC remains vigilant to the upside risks to inflation that might derail the path of disinflation. Under these circumstances, monetary policy must continue to be actively disinflationary to ensure anchoring of inflation expectations and fuller transmission of the past actions.”