Geopolitics · Research note · 21 Sep 2026
The Fed raised, Beijing held, and the rupee is paying
The Federal Reserve's 16 September hike and the People's Bank of China's 16th month without a change put the two largest economies on opposite paths. What that does to rupee funding, foreign flows and the RBI's room.
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Every number, and where it comes from
The first five figures in the note.
The full table has 10 rows. Each figure is as published on the date shown, with its denominator.
| Figure | What it measures | Source |
|---|---|---|
| 3.75 to 4.00% | Target range for the federal funds rate after a 25 bp increase on 16 Sep 2026. Vote 12 to 0. First increase in more than three years. | Federal Reserve FOMC statement, 16 Sep 2026; Charles Schwab, 16 Sep 2026 |
| 4.1% | FOMC median projection for the federal funds rate at the end of 2026 and end of 2027 (midpoint of the target range). June medians were 3.8 and 3.6. Median PCE inflation projection for 2026: 3.7%. | Federal Reserve, Summary of Economic Projections, 16 Sep 2026 |
| 3.00% / 3.50% | China one-year and over-five-year loan prime rates published 20 Sep 2026, unchanged for the 16th straight month. A bank lending benchmark, not the PBOC policy rate. | Xinhua, 20 Sep 2026; Reuters via Business Standard, 20 Sep 2026 |
| 5.01% | US 10-year Treasury par yield, close of 18 Sep 2026. 1 Sep 2026 was 4.79%, so up 22 bp in the month (author's arithmetic). 2-year 4.76%. | US Treasury, Daily Par Yield Curve Rates, 18 Sep 2026 |
| 1.68% / 7.06% | China and India 10-year government bond yields on 21 Sep 2026, market data. US minus China is 333 bp and India minus US is 205 bp, author's arithmetic, one trading day apart from the US figure. | Trading Economics, 21 Sep 2026 |
5 more figures in the PDF, each with its source.
Sources
14 primary releases.
- Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (16 Sep 2026)Target range raised by a quarter point to 3.75 to 4.00 percent by a 12 to 0 vote; inflation remains elevated; uncertainty elevated owing in part to geopolitical developments.federalreserve.gov
- Board of Governors of the Federal Reserve System, Summary of Economic Projections (16 Sep 2026)Median federal funds rate 4.1 percent for end-2026 and end-2027, 3.9 for 2028, 3.2 longer run; June medians 3.8 and 3.6. PCE inflation median 3.7 percent for 2026.federalreserve.gov
- Charles Schwab, FOMC meeting commentary (16 Sep 2026)First hike in more than three years, 25 basis points, unanimous 12 to 0; 16 of 19 participants expect at least one more increase this year.schwab.com
- Xinhua, China's loan prime rates unchanged (20 Sep 2026)One-year LPR 3 percent and over-five-year LPR 3.5 percent, both unchanged from the previous month, per the National Interbank Funding Center.english.news.cn
- Reuters via Business Standard, China keeps benchmark lending rates unchanged for 16th month in September (20 Sep 2026)16th straight month unchanged, in line with all 21 market participants surveyed; US Treasury yield premiums over Chinese bonds near record highs.business-standard.com
- US Department of the Treasury, Daily Treasury Par Yield Curve Rates, September 2026 (18 Sep 2026)10-year 5.01 percent and 2-year 4.76 percent on 18 Sep 2026; 10-year 4.79 percent on 1 Sep 2026.home.treasury.gov
- Trading Economics, China and India 10-year government bond yields; USD/INR (21 Sep 2026)China 10-year 1.68 percent; India 10-year 7.06 percent, up 0.56 points on a year earlier; USD/INR record high 99.82 in March 2026.tradingeconomics.com
- Business Standard, RBI MPC keeps repo rate unchanged at 5.25 percent (5 Aug 2026)Repo rate held at 5.25 percent with a neutral stance; next MPC meeting 5 to 7 October 2026. Corridor confirmed by the RBI's 8 Apr 2026 statement.business-standard.com
- Business Standard, India's foreign exchange reserves fall $4.9 billion to $780.8 billion (18 Sep 2026)Reserves $780.8 billion in the week ended 11 September, from a record $785.7 billion after a $44.9 billion rise driven by the RBI's swap window.business-standard.com
- PTI via Business Standard, FPIs withdraw ₹20,974 crore from equities in September (20 Sep 2026)₹20,974 crore net sold in September to the 18th; ₹2.45 trillion net sold in 2026, above ₹1.66 trillion in all of 2025; July and August net purchases of ₹20,200 crore and ₹29,630 crore.business-standard.com
- PTI via Business Standard, Rupee settles 2 paise up at 95.89 after breaching 96 level (17 Sep 2026)Intraday low 96.10; close 95.89; the Fed's 25 bp hike cited as pressure, offset by RBI dollar sales.business-standard.com
- Reuters via Business Recorder, Indian rupee ends marginally higher; forward premiums ease (21 Sep 2026)Rupee closed at 95.815 per dollar; August 2027 month-end forward premium 2.94 rupees.brecorder.com
- Deccan Herald, Year-ender 2025: the rupee's most volatile year (31 Dec 2025)The rupee closed 2025 at 89.85 per dollar.deccanherald.com
- Reserve Bank of India, Monetary Policy Statement 2026-27, Resolution of the MPC (8 Apr 2026)Policy repo rate unchanged at 5.25 percent; SDF 5.00 percent; MSF and Bank Rate 5.50 percent; neutral stance.rbi.org.in