Fed policy –Observations by the editorial BusinessLine [1] Inflation in US hovering around 4% vis a vis long term target of 2% [2] Treasury yields hardening and dollar index strengthing above 100 [3] Rate cutting cycle is complete and rates could harden going forward [4] ECB increased its policy rate by 25 basis points [5] BoJ raised rates to 31 year high of 1% [6] Interest rates spread between Indian government bonds and sovereign bonds of other countries is set to narrow further.[7] If the rupee is impacted  negatively due to these narrowing spreads, the RBI may have to act —