ETMarkets Smart Talk | Rate-cut cycle over, RBI may be at cusp of rate hikes; yields could inch higher: Puneet Pal
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Key takeaway
RBI is expected to shift from a rate-cut stance to potential rate hikes due to rising inflation and crude oil prices.
- Step 1 · The triggerPersistent inflation and high crude oil prices prompt the RBI to signal a shift towards rate hikes.
- Step 2 · Knock-onIndian bond yields rise as markets price in tighter monetary policy.
- Step 3 · Knock-onFixed-income mutual funds like PGIM India face mark-to-market losses and potential investor outflows.
- Step 4 · Reaches youSMEs with floating-rate or soon-to-be-refinanced loans see higher borrowing costs, squeezing margins and cash flow.
The trigger is reported by the source below. The steps that follow are Branch²’s traced reasoning — how the shock could reach a business like yours, not a prediction.
Source: IN:Economic Times
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