US RETAIL SALES (MOM) (AUG) ACTUAL: 1.2% VS -0.6% PREVIOUS; EST 0.8%

BREAKING: US INTEREST RATE DECISION ACTUAL 4% (FORECAST 4%, PREVIOUS 3.75%)

FED SAYS PRODUCTIVITY GROWTH IS STRONG AND CAPITAL INVESTMENT IS ROBUST, ADDING THAT THE COMMITTEE 'WILL DELIVER PRICE STABILITY'.

FED SAYS ECONOMIC ACTIVITY IS EXPANDING AT A SOLID PACE, DOMESTIC SPENDING HAS BEEN RESILIENT DESPITE ELEVATED UNCERTAINTY, JOB GAINS HAVE KEPT PACE WITH THE WORKFORCE, AND INFLATION REMAINS ELEVATED — DROPPING ITS EARLIER DESCRIPTION OF THAT OWING IN PART TO SUPPLY SHOCKS.

FED OFFICIALS RAISE THEIR MEDIAN FED FUNDS RATE FORECAST TO 4.1% AT END-2026, 4.1% AT END-2027 AND 3.9% AT END-2028, UP FROM 3.8%, 3.6% AND 3.4%, RESPECTIVELY.

FED POLICYMAKERS SEE 2026 PCE INFLATION AT 3.7%, CORE PCE AT 3.4%, GDP GROWTH AT 2.3% AND UNEMPLOYMENT AT 4.1%, WHILE 12 OF 18 OFFICIALS EXPECT ONE MORE 25-BASIS-POINT HIKE THIS YEAR.

US HOUSE FOREIGN AFFAIRS RANKING MEMBER MEEKS SAYS HE WILL BLOCK PROPOSED $2.8B ISRAEL BOMB SALE - SOURCES

WARSH: INFLATION IS TOO HIGH AND HAS BEEN FOR TOO LONG

WARSH: TOO MANY INF. CATEGORIES ARE STILL RISING MORE THAN 3%

WARSH: PREDOMINANT FOCUS OF FED IS ON PRICE STABILITY

TRADERS PRICE IN ABOUT A 50% CHANCE OF A FED RATE HIKE IN OCTOBER.

FED CHAIR WARSH — KEY TAKEAWAYS

• FED RAISED RATES 25 BPS, WITH WARSH SAYING INFLATION IS TOO HIGH AND HAS BEEN FOR TOO LONG.

• WARSH: INFLATION REMAINS ELEVATED, AND SUMMER DATA DOES NOT SHOW A MEANINGFUL IMPROVEMENT.

• TOO MANY INFLATION CATEGORIES ARE STILL RUNNING ABOVE 3% ON BOTH 6-MONTH AND 12-MONTH MEASURES.

• FED'S PREDOMINANT FOCUS IS INFLATION; UNDERLYING INFLATION HAS NOT YET MET THE TEST FOR A TIMELY RETURN TO 2%.

• WARSH: THE US ECONOMY HAS STRENGTHENED OVER THE SEVEN WEEKS SINCE THE LAST MEETING.

• WARSH DESCRIBED THE ECONOMY AS RESILIENT, WITH KEY ECONOMIC MARKERS IMPROVING IN RECENT MONTHS.

• LABOR MARKET REMAINS STRONG — JOBLESS RATE LOW, JOB OPENINGS AND HOURS INCREASING.

• WARSH: THE US IS MORE OR LESS AT FULL EMPLOYMENT.

• WARSH SAID THE FED DOES NOT NEED TO HARM THE JOB MARKET TO ACHIEVE ITS PRICE-STABILITY OBJECTIVE.

• FED OFFICIALS WIDELY AGREED THAT FINANCIAL CONDITIONS ARE NOT RESTRICTIVE.

• THE FED DECIDED TO REMOVE A DOSE OF POLICY ACCOMMODATION WITH TODAY'S RATE HIKE.

• WARSH IDENTIFIED THREE REASONS FOR HIGHER BOND YIELDS:
1. ECONOMIC STRENGTH
2. INTENSE COMPETITION FOR CAPITAL AS CAPEX SURGES
3. GEOPOLITICAL RISKS

• WARSH: PRICE STABILITY IS FOUNDATIONAL TO ECONOMIC GROWTH AND TODAY'S MOVE WAS A STEP TOWARD ACHIEVING IT.

• WARSH SAID THE FED WILL FOCUS ON BROADER TRENDS RATHER THAN INDIVIDUAL DATA POINTS, INCLUDING CPI.

• WARSH DID NOT PREJUDGE FUTURE RATE DECISIONS, SIGNALING THAT POLICY WILL REMAIN DATA-DEPENDENT.

• TRADERS INCREASED BETS ON TWO MORE FED RATE HIKES BY YEAR-END.

• WARSH ALSO SAID THE FED MUST REMAIN INDEPENDENT, ADDING THAT “INDEPENDENCE IS A TWO-WAY STREET.”

• KEY TAKEAWAY: THE FED IS CLEARLY PRIORITIZING INFLATION CONTROL, WHILE A STRONG ECONOMY AND RESILIENT LABOR MARKET GIVE POLICYMAKERS ROOM TO KEEP FINANCIAL CONDITIONS TIGHTER.

Fed's Chair Warsh: I was not waiting breathlessly on any one data point, including CPI.

U.S FED DELIVERED HAWKISH RATE HIKE 🔴🔴🔴🔴🔴

ACTION FOR THE DAY

PM Modi's 76th Birthday

IPO Opening-NSE, Sonaselection

PM Modi To Inaugurate SEMICON 2026

Sensex Expiry

Tata Sons Board Meet

IPO Listing- ARCIL, Manipal Payment, Steamhouse

IPO Listing- LCC Projects, Karamtara Eng, Rentomojo

Fund Raising-Yatharth Hospital, OnEMI Technology

Buyback-Emami, Responsive Industries

UK BOE Rate Decision (Status Quo Expected)

US Pending Home Sales Data

US Initial Jobless Claims Data

OPENING CUES

Fed Hikes Rates By 25bps

Fed Signals Further Rate Hike

Trump Says War With Iran Will End Soon

Treasuries Pare Losses, Dollar Gains

Oil Extends Decline As Supply Concerns Ease

Sharp Fall In Turkey Market On Liquidity Issues

Gold Pressured By Fed's Hawkish Outlook

Threat of Yen Carry Unwind Trade Reduces

SEC, CFTC Positive Commentary On Crypto

US Futures, Nikkei Rises After Fed Rate Decision

NSE IPO Opens Today

FII Shorts Unchanged At 88%

FII Sellers In Cash Market For 6th Day

Rupee Likely To Remain Under Pressure

PB FINTECH LTD: CO. APPROVES ACQUISITION OF REMAINING 20% STAKE IN MYLOANCARE TO MAKE IT A WHOLLY-OWNED SUBSIDIARY; AUTHORIZES INVESTMENT OF ₹10 CR IN PB WHEELS AND ₹1 CR IN PB FINANCIAL ACCOUNT AGGREGATOR.

GOVT MAY CUT VEGETABLE OIL IMPORT TAXES AS PRICES CLIMB

INDIA GETS LIMITED UK CAR IMPORT QUOTA APPLICATIONS UNDER FTA; ONLY 642 CARS LIKELY IN 2026 AGAINST 10,000-UNIT QUOTA (TATA MOTORS)

Jefferies on Hitachi

Maintain Buy, TP Rs 45790

Forum takeaways

Management is confident on power transmission and distribution (T&D) spend being a multi-year growth story in India.

Renewed focus on increasing the share of services in revenues should add to growth ahead.

Battery Energy Storage System (BESS) and Data Centers were highlighted as a huge opportunity in India ahead

Believe 54% EPS CAGR in FY26-29E should drive upside.

JEFFERIES ON UPI MDR

POSITIVE FOR PAYTM & PINE LABS

• MDR is higher than Jefferies’ earlier expectation of 25 bps, increasing the industry revenue pool.

• Jefferies had already factored in 25 bps MDR for Paytm, and now raises FY28–29 estimates by a further 10–12%.

• Paytm target price raised to ₹2,150/share.

• Jefferies factors the full MDR benefit for Pine Labs, leading to a 20–25% EPS uplift for FY28–29.

• Pine Labs target price raised to ₹235/share.

JPMORGAN ON CEMENT SECTOR

ULTRATECH TOP PICK

• Dealer checks indicate some price improvement in Southern India.

• Pricing remains largely flat elsewhere, while demand is still mostly lacklustre.

• September quarter earnings likely to be weaker due to monsoon seasonality and cost pressures.

• A late festive season could prolong the sector’s lean period.

• JPMorgan believes cement stocks may be close to a bottom in relative performance.

• Sector could see a rebound starting late November.

• UltraTech Cement is JPMorgan’s top pick to benefit from the seasonal recovery.

JPMORGAN ON FMCG ; TARGET PRICES CUT ACROSS SECTOR

• HUL ; OVERWEIGHT | TP ₹2,375 FROM ₹2,425

• MARICO ; OVERWEIGHT | TP ₹915 FROM ₹960

• GODREJ CONSUMER ; OVERWEIGHT | TP ₹1,000 FROM ₹1,050

• DABUR ; NEUTRAL | TP ₹425 FROM ₹485

• COLGATE ; NEUTRAL | TP ₹1,976 FROM ₹2,250

• HONASA ; UNDERWEIGHT | TP ₹410