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According to experts, the forthcoming Union budget would set the fiscal deficit for 2023-24atbetween 5.8% and 6% of GDP, with the government pushing on with fiscal consolidation despiteexpenditure pressures. They said that the Centre is projected to fulfill the planned fiscal deficitprojection of 6.4% of GDP for the current fiscal year.

Fed's Harker reiterated support for 25bp hikes ahead and noted the time for supercharging ratehikes is over, while he added that the Fed is committed to lowering inflation back to the 2% targetand expects Fed to raise rates 'a few more times' this year.

Fed's Bullard said his dot plot forecast for 2023 was just above the median and expects the 2023rate to be in the 5.25-5.5% range (vs. 5.1% median dot), while he added that inflation will likelyrecede in 2023 but not as fast as expected by financial markets.

Fed's Mester said further rate hikes are still needed to decisively crush the worst inflation bout infour decades, while she added that the Fed’s key rate should rise a “little bit” above the 5% to5.25% range that policymakers have collectively projected for the end of this year.

Fed Chair Powell tested positive for COVID and is experiencing mild symptoms

Dollar was ultimately flat on what was a choppy session as it digested the large swings in the Yenand with lows seen after a slew of soft US economic data, before rebounding again on hawkish Fed commentary.

USINR Outlook

While expecting doubt on continuation of ascent, we had only expected a consolidation in the 81.59-81.50 vicinity. The melt down, hence, surprised us, prompting us to look at 80.9as the downside target. But, given the steepness of yesterday’s fall, a pull back to 81.4-81.50 may be expected.

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