Federal Reserve Chair Kevin Warsh's first Jackson Hole speech has put the spotlight back on a question that matters well beyond US interest rates: how much are investors willing to pay for growth when the global cost of capital stays high?

The annual symposium hosted by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming, is closely watched by global markets for signals about the direction of US monetary policy. Remarks delivered there by the Fed Chair traditionally set the tone for expectations around interest rates — past symposium speeches, such as Ben Bernanke's 2010 remarks that foreshadowed a second round of quantitative easing, have moved global markets — and they ripple through equity markets worldwide, including in India.

Warsh, who was appointed Fed Chair in 2025 after serving as a Fed governor from 2006 to 2011, has been known in financial circles for his hawkish leanings on inflation and monetary policy, which is part of why his Jackson Hole debut drew heightened attention from investors.

India's stock market has long commanded a valuation premium over many emerging-market peers, with investors historically willing to pay higher multiples for the country's growth prospects. That premium is sensitive to the global cost of capital: when US interest rates and bond yields stay elevated, risk appetite for relatively expensive growth assets tends to come under pressure, and capital flows to emerging markets can be affected. Foreign portfolio investor flows into Indian equities have historically swung with shifts in US rate expectations, making Fed communication a recurring variable for domestic market sentiment.

Warsh's message, delivered in his first appearance at the symposium as Fed Chair, has therefore refocused attention on whether Indian equities can sustain their premium pricing in an environment where borrowing costs remain high globally. Investors tracking this question will be watching subsequent Fed communications — including FOMC meetings and minutes — for further clarity on the rate path.

The original article is available at CNBC-TV18. Full access requires a CNBC-TV18 Access Membership (https://www.cnbctv18.com/access/). Author page: Ajay Vaishnav, who also posts at X (Twitter).