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Assuming Kevin Warsh succeeds Jerome Powell as Federal Reserve chair ​by mid-May as planned, one of his first acts may ​be to preside over an interest rate hike, a true baptism of fire which would raise the ire of his ​boss, President Donald Trump.With the Middle East conflict triggering a massive global energy shock, oil soaring above $100 a barrel, and pre-conflict U.S. inflation figures already flashing red, it's not an outlandish scenario. Fed officials are discussing it, and financial markets are now pricing it.Also Read | Jerome Powell says he will remain US Fed chief until successor confirmedThe Fed left policy unchanged on Wednesday as expected, keeping the fed funds target range at 3.50-3.75%. Officials also maintained their projections ‌for one quarter-point rate ⁠cut this year ⁠and one next year.However, the wind is blowing in the opposite direction, although the idea that the Fed's next move could be a rate hike pre-dates the recent energy shock. Policymakers have been discussing ​it all year.OPTIONS FLIPMinutes of the Fed's January meeting show that "several participants" indicated they would back a "two-sided" description of the Fed's future decisions, acknowledging the possibility that the next move might ​be to raise rates.Powell downplayed the possibility at the time, telling reporters in his January press conference: "We don't take things off the table, but it isn't anybody's base case right now - anybody's base case - that the next move will be a rate hike."Also Read | Another oil price jump further pushes out Fed rate-cut oddsHe was a little less forthright on Wednesday, telling reporters that tightening ​was discussed again, adding: "The vast majority of participants don't see that as their base case, but of course, ⁠we don't ‌take things off the table."Not only was it discussed, the revised 'dot plot' summary of officials' rate projections showed that one policymaker ​penciled in a rate hike ​for next year. If inflationary pressures persist, that official won't be a lone voice for long.The revised dot plot shows ⁠seven of the Fed's 19 rate-setters expect rates to remain unchanged this year, seven envisage one quarter-point ​cut, and five feel two will be needed.Traders doubt there will be any more easing at all. Derivatives market ​pricing shows the probability of a rate cut this year is close to zero and, according to JPMorgan analysts, December 2026 'SOFR' futures options imply a roughly 20% chance of a hike by year end.TIME IS NOT ON HIS SIDEThis would be difficult terrain for Warsh. It would be anathema to Trump, a long-standing advocate of low interest rates who has lambasted "clueless" Powell for being "too late" in cutting. Trump even said on Monday that the Fed should have a "special meeting" to cut rates immediately. This was one day before the scheduled two-day policy meeting began.Trump expects Warsh to push for lower rates."If he came in and said 'I wanna raise ‌them' ... he would not have gotten the job," Trump told NBC last month.Powell on Wednesday indicated that further easing is conditional on goods and non-housing services inflation coming down, and on the one-off price hits from tariffs and now, the energy shock, fading quickly.February's producer ​price inflation released earlier ​on Wednesday suggests that is wishful thinking. The ⁠annual core rate jumped to 3.9%, which Morgan Stanley economists say raises 3-month annualized core PCE inflation - the Fed's preferred measure - to 4.56%. That's more than double the Fed's 2% target. And remember, these are pre-oil shock numbers.Inflation has been above the Fed's target for five years, and all the signs are it will ​increase in the short term. Powell is also rightly worried that the oil shock could hamper consumer spending and create negative wealth effects, causing longer-term damage to employment and growth.Powell has only one more scheduled policy meeting as Fed Chair. He can probably afford to wait and see how these dynamics play out. Warsh won't have that luxury.

ET Intelligence group: Geopolitical uncertainties are hitting small-cap valuations harder than that of their larger peers, according to an ETIG analysis. Currently, 58.3% of the small-cap stocks in the BSE 500 index trade below their three-year average valuations compared with sub-50% levels seen in large and mid-cap segments. The valuation gap persists across longer horizons and technical indicators such as daily moving average (DMA), implying that small-caps are slipping into the oversold region faster than their larger counterparts. When seven-year average valuations are considered, 46% of the small-caps in the sample are undervalued compared with 41% and 34% of the large-caps and mid-caps respectively. Stretching the horizon further to 10 years, 42% of the small-caps look cheaper compared with 37% large-caps and 39% mid-caps. For the total sample of BSE 500 companies, over half or 52% are undervalued on a three-year horizon while the proportion falls to 41% and 31% for seven-year and 10-year horizons.129689942 In addition, at present, 90% of the small-caps trade below their 200 DMA compared with 63% large caps and 74% midcaps. It implies that small caps are showing significant price exhaustion. For this analysis, companies in the BSE 500 index with a market capitalisation of '50,000 crore and above are considered as large-caps, those with market cap between '20,000 crore and '50,000 crore are designated as mid-caps and the remaining are assigned small-cap status. It broadly adheres to the distribution of 85-10-05 wherein top companies arranged in the descending order of their market caps form 85% of the total market cap of the index, mid-caps account for 10% and the remaining portion is assigned to small-caps. Among the valuation parameters, price-book (P/B) multiple is used for banking and finance companies while price-earnings (P/E) multiple is considered in the case of non-lending companies that include manufacturing, services and trading enterprises.

Mumbai: Over the past decade, the rupee has typically closed stronger on March 31, relative to its weakest level during the previous quarter. Intervention by the Reserve Bank of India (RBI) tends to intensify in the final week of March, supporting a firmer end-of-year level. Such an outcome is considered favourable for corporate balance sheets, as companies usually convert foreign currency liabilities into rupees at the close of the financial year. Going ahead, market participants will closely monitor the central bank's intervention strategy, as the current environment presents a notable hurdle for this trend. RBI is estimated to have already sold more than $15 billion in March to support the rupee amid geopolitical tensions in West Asia and elevated crude oil prices. While many traders expect the rupee to close the month near the 91.75 per dollar level, some anticipate a weaker outcome, with the currency around 92.50 per dollar, particularly if the central bank scales back interventions should oil prices remain above $100 per barrel.129689887 "We typically see some extra intervention in the last days of the fiscal year. Many corporates state their foreign currency liabilities in rupee terms in their balance sheet, and a stronger rupee means a stronger balance sheet at year end. This time too, stronger intervention is expected, and I think the rupee would close around 92/$1 on March 31," said Sajal Gupta, head of forex and commodities at Nuvama. The rupee touched a record low of 92.64/$ on Wednesday amid soaring oil prices and uncertainties in West Asia. Currency markets were closed on Thursday on occasion of Gudi Padwa.

New Delhi: The Himachal Drug Manufacturers Association (HDMA), which represents over 500 pharmaceutical manufacturing units, has urged the government to impose "emergency price ceilings" and form a "crisis task force" as pharma units face a 200-300% input cost surge due to the ongoing war.The ongoing global conflicts have severely disrupted the supply of critical pharmaceutical raw materials, triggering unprecedented price increases of 200-300% across the board, the lobby group said in a letter to the Department of Pharmaceuticals.The MSME pharma sector has sought urgent support to safeguard the industry and India's healthcare stability. It has asked the department to intervene and find practical and amicable solutions, and simultaneously ensure strict action against black marketeers who have been benefiting from this crisis."Unprecedented 200-300% price hikes in APIs/solvents/excipients and packaging material threaten MSME survival and essential medicine supply," it said in the letter sent this week.According to the association, active pharmaceutical ingredients (APIs) have witnessed alarming price surges in an unprecedented short span. Paracetamol alone has jumped from ₹250 to ₹450/kg within just 15 days, a near 80% spike."This is not an isolated case; APIs, excipients and solvents across the board are experiencing similar, unsustainable escalations, making formulation costs entirely unviable for MSME manufacturers," said an industry expert.It further said that the prices of critical packaging materials, which include granules, aluminium foil, kraft paper, PET bottles and glass bottles, have skyrocketed, pushing units towards closure.Deliberate hoarding and black marketing by unscrupulous distributors and vendors have started creating artificial scarcity in the supply chain, the person further said."This is directly threatening MSME viability, endangering tender commitments, risking widespread medicine shortages, and accelerating job losses across the sector," he said.The association has urged the government to expand the National Pharmaceutical Pricing Authority (NPPA) mandate to actively monitor and regulate prices and supply of APIs, excipients, solvents and packaging material.It has asked the department for the creation of a crisis task force comprising government officials and MSME pharma representatives to assess ground realities, coordinate supply restoration and implement corrective measures on a war footing.Similarly, it has asked the government to invoke the Essential Commodities Act, 1955 to control prices, prevent hoarding and ensure equitable distribution of critical pharmaceutical inputs and LPG supply across industrial and domestic consumers.