Americans spend more.

"Prices in the US, according to the Federal Reserve's preferred metrics, rose 5.4% from a year earlier and the core gauge was up 4.7%, both hotter than forecast after slowing for several months. In Europe, core price growth reached a record 5.3% - more than the initial reading of 5.2%. Headline inflation, which includes food and power, also ticked up. Inflation is also too high in Israel and New Zealand, where officials hiked rates." ET. "Consumer spending, which accounts for more than two-thirds of US economic activity, shot up 1.8% last month. That was the largest increase since March 2021." Reuters. "When adjusted for inflation, consumer spending increased 1.1%, also the biggest gain since March 2021." "The overall surge in spending came as wages and salaries jumped 0.9%," and "The economy grew at a 2.7% pace in the fourth quarter." "The Commerce Department reported that the Personal Consumption Expenditures price index, the metric by which the Fed measures its 2% inflation target, rose 5.4% last month (January) from a year earlier, a pickup from an upwardly revised 5.3% annual pace in December." Reuters. "She (Cleveland Fed President Loretta Mester) is among the minority of Fed policymakers who in December thought they would need to lift the policy rate to 5.4% to stop inflation, while most believed 5.1% would suffice." This is ominous for India. In its last meeting on 6-8 February, the Reserve Bank (RBI) raised interest rate by 25 basis points to 6.5%. RBI. Till March 2022 the Federal Funds rate was 0-0.25% and was increased by 25 basis points on 17 March 2022. After a total of 8 hikes since then the Funds rate is at 4.50% to 4.75%. Forbes. While the interest rate in the US was at 0 lower bound, the RBI kept the interest rate in India constant at 4% from May 2020, NDTV, until forced to increase its repo rate in an emergency meeting of the Monetary Policy Committee in May 2022. ET. Therefore, till May 2022 the difference in interest rates between India and the US was 4%. The difference has narrowed to 2% presently, and if it narrows still further foreign investors will have little incentive to invest in India because they will lose money if the dollar strengthens against the Indian rupee. "India's forex reserves declined by $5.68 billion to $561.27 billion as of February 17," as "The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments." ET. "India's gross domestic product (GDP) for the October-December quarter slowed to 4.4 percent, the data shared by the Ministry of Statistics and Programme Implementation showed." ET. "The slowdown was caused primarily by slowing manufacturing activity, weaker personal consumption, and lower government expenditure." Quartz. "Consumer prices have been on the rise for nearly a year, affecting Indians' purchasing power." The US Fed is determined to control inflation to protect the spending power of Americans. The RBI is concentrated on supporting the rupee even as Indians are increasingly impoverished by inflation. Americans are richer than Indians because they can buy more. Simple.