Face it, it's impossible.

"After opening the door to higher interest rates,...US Federal Reserve Chairman Kevin Warsh has to decide how to follow though with actions." "In a speech to the Kansas City Fed's annual Jackson Hole conference in Wyoming,... Warsh went further than many observers expected in agreeing that higher interest rates may be needed to curb inflation that is stuck above the central bank's 2% target." "Fed policymakers will meet on September 15-16." Reuters. President Donald Trump piled on the pressure when he said, "We should have the lowest rate of any country in the world...Lower the rate or I'll stop trading with countries with which we have a deficit." Reuters. That would push inflation higher and force the Fed to raise rates, possibly by a greater amount. On 2 September, "Bond prices continued to slide in Asia and Europe, pushing borrowing costs to multi-decade highs as the Middle East conflict drives up energy prices and layers concerns about inflation on top of worries about ballooning government debt." Reuters. "In the United States, 10-year interest rates sit around 4.7%, surging nearly half a percent this year," while, "Australia's government now has to offer investors more than 5% on its 10-year bond, which hit a 15-year high after a long period of low interest rates." "US national debt has grown to more than  $40 trillion," and so, "Funding debts of this size is pushing up interest rates worldwide." The Conversation. "With benchmark Japanese bond yields breaking through a three-decade-old barrier, higher returns are starting to tease capital home." Japan "is the biggest owner of US Treasuries and one of the most reliable buyers of sovereign debt worldwide." Reuters. Why should we Indians care about what is happening in the US and Japan? "As of August 18, the two-year Treasury yield stood at 3.76%, while the 10-year and 30-year yields were 4.71% and 5.28% respectively." India will be affected as, "Sustained higher US Treasury yields could make dollar-denominated assets more attractive relative to emerging-market investments, potentially putting  pressure on capital flows into India." "Higher global yields can increase the return investors demand from Indian bonds." And, "India remains exposed to movements in the dollar, commodity prices and global trade." BT. For years, "With Japanese interest rates close to zero, hedge funds and institutional investors borrowed cheaply in yen and invested in higher-yielding assets -- from US Treasuries and AI stocks to emerging-market equities." That is the yen carry trade. Although Japanese investors hold a small amount of Indian equities, Indian markets could still be affected as other foreign investors divert funds from India to safer markets. MC. The Reserve Bank of India (RBI) has taken preemptive action. "India attracted a much larger-than-expected $136.38 billion through special foreign-currency mobilisation schemes," as "Indian banks raised $127.23 through non-resident foreign currency deposits, with additional inflows coming through external commercial borrowings and overseas foreign-currency borrowings." "India's banking system liquidity surplus jumped to Rs 9.7 trillion ($102.76) as most banks have swapped their dollar inflows with the central bank." ET. This money does not come free. At 6.50% rate of interest (IDBI Bank) $127.23 billion will grow to $153.69 billion compounding for 3 years and to $174.32 billion in 5 years, which banks will have to repay. The RBI will have to pay a bill of about $10.6 billion for protecting banks from rupee depreciation. ET. The rupee has strengthened due to all this inflow of foreign exchange which could bring inflation down by making imports cheaper. That would allow the RBI not to increase interest rate and help the government to borrow cheaply. Foreign investors aren't fools. The RBI may be able to control interest rates, borrow capital to manage capital flows but it will not be able to control foreign exchange rate. wikipedia. It's impossible. The cost could be enormous. For us.