Chetan Ahya, Chief Asia Economist and Global Head of Economics, Morgan Stanley, on Monday said that the US Federal Reserve is expected to take two rate hikes of more than 50 basis points (bps) in the next two consecutive meetings even as inflation remains hotter than expected. He said the Fed could, in fact, increase rate by 75 bps in one of the meetings in the summer.

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"We are expecting, now that this inflation number has been a surprise, that the Fed will probably have to take more than two 50 basis point rate hikes in the two consecutive meetings... So it could be another third 50 basis point rate hike in September. And the additional risks that we are also highlighting is that in one of the meetings in the summer, they could take up 75 bps run-rate instead of 50," Ahya said in an interview with CNBC-TV18.

The US FOMC (Federal Open Market Committee) decision is scheduled on June 15.

Ahya's comments came after the US inflation data showed it hit a fresh 40-year high in May, raising expectations that the Fed would stay on the path of hiking interest rates aggressively for long. The US consumer prices rose 8.6 percent, surpassing the estimates of economists who had projected the peak in March.

The worse than expected inflation rate can be attributed to the ongoing Russia-Ukraine war that have led to a rise in global fuel and food prices and supply-related concerns due to COVID-induced lockdowns in Asia.

Ahya said it is the interest rate which will be used as a more active tool than balance sheet by the Fed in its policy framework.

Steven Englander, Global Head-G10 Fx Research and North America Macro Strategy, Standard Chartered, agreed with Ahya saying that he doesn't think the Fed is going to deviate from the 50 basis points hike and in fact, go beyond if required.

"I doubt that they're going to change their schedule on the tapering. I think they want to make that as invisible as possible. I also suspect that they're not going to deviate from the 50 basis point (bps) hike... I think the Fed will stick to 50. But I think they will also signal that they could do 75 if circumstances get worse," he told CNBC-TV18.

"Most of the FOMC participants have indicated that they want to get to neutral as fast as possible. So that suggests that they see themselves going up close to 3 percent (rate). I think that they're eager to regain credibility with respect to inflation fighting," he added.

According to Englander, the US economy could slow down much more dramatically going forward.

While global macros look worrisome with the US May Consumer Price Index coming in much higher than expected, market is expecting India’s last month's CPI, due today, to also be higher than estimates. The CPI inflation for May is expected to stay above the Reserve Bank of India’s (RBI) upper tolerance limit of 6 percent for a fifth consecutive month.

Given higher inflation, Ahya expects RBI also to hike rates by 50 bps twice consecutively.

"We have been a bit more hawkish than consensus and then we have been building in RBI’s terminal policy rate to be at 6.5 percent. And we do think that they will take up two consecutive 50 basis point rate hikes in the next meeting and then in the August meeting," he said, adding, "I would still say that there are upside risks to our forecasts on inflation and policy rates."

According to Ahya, the risk to India's growth remain in the form of factors such as weakening external demand and elevated commodity prices. He added that Asia's and India's trade numbers are impacted as the exports are weakening due to the US shifting spending to services from goods.

"Both the consumer spending shift from goods to services and global capex slowdown are weighing on Asia’s exports and also India's exports. So, that lever is definitely becoming a headwind as a challenge for growth outlook for Asia and India," said Ahya.

However, since India is a domestic demand oriented market, it will benefit from reopening of economy, investment cycle, government's structural reforms and diversification of supply chain out from China, he added.