The US Federal Reserve could raise interest rates again in 2026, with implications for Indian equities, the rupee, government bonds and gold. Here’s how higher US yields and a stronger dollar could affect these asset classes.

The Fed chair’s comments on stabilizing prices leave no room for interpretation.

Markets expect one more hike in 2026, likely at the Fed’s December meeting. What’s more in question is the rate outlook for 2027. Currently markets see interest rates rising at a measured pace with perhaps one or two further hikes next year.

According to The Fly, Hatzius said in a note that two additional rate hikes would likely be more appropriate, and that the probability of a singular one in December has decreased.

The Fed voted unanimously on Sept. 16 to raise rates, the first hike in three years.

On September 16, the Federal Reserve raised the federal funds target range by a quarter point to 3.75%–4.00%, marking its first increase since July 2023. Chair Kevin Warsh stated that inflation has been too high for too long and that price stability is the committee's overriding focus.

Gold prices fell as a stronger dollar and rising Treasury yields offset fading Fed rate hike bets ahead of September meeting minutes.

Patrice Onwuka, VP of economic policy at the Independent Women's Forum, discusses the Federal Reserve's upcoming interest rate decision. She analyzes the potential economic impact of a rate hike and President Trump's call for lower rates.