MONETARY EASING CYCLE
Incomplete transmission of policy rates could delay reversal of rate cycle by RBI
RBI faces challenges in rate transmission due to incomplete hikes. Banks show varied transmission rates. Governor Das stresses effective transmission. Rate cuts may come post-October with clearer risk insights.
Swiss National Bank continues rate cuts, says inflation eased again
The Swiss National Bank cut interest rates on Thursday, maintaining the central bank's position as a frontrunner in the global policy easing cycle now underway.
Sterling steady ahead of BoE decision; dollar wobbles against yen
The British pound was steady ahead of the Bank of England rate decision, while the dollar awaited market catalysts. Currencies traded in tight ranges post-US holiday, with focus on BoE, Swiss, and Norwegian central bank decisions.
EM bond rally threatened as hawkish flags multiply
The balmy days of dovish monetary policy that fuelled a rally in emerging-market bonds looks to be over as central banks across the developing world turn more hawkish.
Global rate-cut juggernaut is struggling to start
Central banks cagey about joining the global interest-rate cutting cycle may reveal themselves this week with a quartet of decisions in advanced economies.
10-year bond yield slips below 7% on lower inflation prints
The fall in government bond yields to 6.98% reduces borrowing costs across the economy, influencing corporate borrowing prices. Sovereign debt yields serve as benchmarks for determining corporate borrowing costs.
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Is Fed FOMC outcome hawkish or dovish? Here's is what Street says
The US Federal Reserve maintained rates at 5.25-5.50% in its June monetary policy, with Chair Jerome Powell expressing caution about the inflation outlook and the need for data revision. Experts weigh in on the decision.
Fed pivot or not, RBI likely to go its own way on rates, says I-SEC PD
“It is plausible to make the interpretation that RBI MPC may well pivot before Fed starts its own cutting cycle and that was the motivation for the statement... However, we believe the reason for this emphasis was the opposite based on other statements,” wrote economists from ICICI Securities Primary Dealership.
US Fed's 'dot plot' could offer glimpse of rate-cut resolve
Since raising their benchmark federal funds rate more than five percentage points starting in March 2022, the Federal Open Market Committee (FOMC) has held borrowing costs at a two-decade high since July. A host of Fed leaders have suggested in recent weeks they see no rush to cut rates, with inflation more persistent and the outlook for growth staying solid.
US Fed likely to remain on pause and pare back rate cut expectations
The US Federal Reserve is likely to keep interest rates unchanged this week, but could pare back the number of cuts it has penciled in for this year, as policymakers digest a mixed bag of economic data. But with the data still painting a mixed picture, he is unlikely to rock the boat too much this week, according to Oxford Economics chief US economist Ryan Sweet.
No rate cut seen in August either, but enough signs of a shift in stance
The minutes of the meeting will be available on June 21. Varma and Goyal have argued that high interest rates might be hindering potential growth. They have previously debated that a high real interest rate—the difference between the actual interest rate and inflation—could be compromising growth.
RBI holds rates amid food inflation fears
The Reserve Bank of India (RBI) kept policy interest rates unchanged for the eighth consecutive meeting due to concerns about rising food prices. The central bank raised its economic growth forecast for FY25 to 7.2% from 7%, driven by state investments and broad-based consumption. Despite inflation worries, the repo rate remains at 6.5%. A divide in the Monetary Policy Committee emerged, with two members favoring a rate cut. Equity indices surged, but bond yields rose slightly. Governor Das emphasized India's independent monetary policy stance.
No rate cut seen in August either, but enough signs of a shift in stance
In the normal course of events, the rising dissent in the MPC should have led to more joining the camp of rate cut seekers as data turns benign. Inflation may not have come back to the 4% target, but it's not threatening to soar. For the US, it is at 3.4% in April when the target is 2%.
Another vote surprise! Dissent grows in RBI that has more 'elbow room'
RBI Monetary Policy: The Reserve Bank of India maintained key lending rates unchanged for an eighth consecutive time with a larger split in votes. Governor Shaktikanta Das emphasised the need for price stability in the growing economy. The unexpected vote split indicates a potential shift towards a rate cut in future policies, though 'greater elbow room' for price stability may not demand an immediate cut. The RBI's stance aligns with market expectations, with a focus on balancing inflation and growth. Despite robust economic growth, inflation remains a concern.
High FD interest rates may not last long despite RBI status quo; is this the last window to book fixed deposits at higher rates?
FD Interest Rates: RBI in its MPC meeting on June 7 kept the repo rate unchanged at 6.5%. This marks the eighth consecutive MPC with status quo, benefiting fixed deposit investors with high rates. However, going forward the interest rate cycle to reverse. The potential for a rate cut later in the year is anticipated.
Home loan borrowers may have to wait longer for lower EMIs but a rate cut likely this year; how to make the most of it
Home Loan Interest Rates: The Reserve Bank of India (RBI) in its recent Monetary Policy Committee meeting decided to maintain the repo rate at 6.5%, prolonging the wait for home loan borrowers seeking relief from high interest rates and increased EMIs. Despite the current pause in repo rate the possibility of a rate reduction this year is still there.
RBI maintains interest rates amid growing calls for easier money policy
The Reserve Bank of India (RBI) kept interest rates unchanged in its eighth consecutive meeting, with some members leaning towards easing monetary policy due to concerns about rising food prices. The central bank raised its FY25 growth forecast by 20 basis points to 7.2%, leading to a surge in equity indices. Inflation remains a concern due to global commodity price increases and potential food price spikes.
Sensex climbs 300 points ahead of RBI MPC decision, Nifty above 22,900
The domestic benchmark equity indices, Nifty50 and Sensex, started the day with gains on Friday, as investors anticipated the Reserve Bank of India's policy meeting. It is widely anticipated that the RBI will maintain interest rates unchanged during the meeting.
RBI MPC Meeting: Das & Co may look at food bills to keep its stance, rate unchanged
RBI Policy Meeting: The Reserve Bank of India (RBI) is expected to maintain the repo rate at 6.5% with a focus on withdrawing accommodation, marking the eighth consecutive time it remains unchanged. Economists predict the unchanged stance, citing persistent inflation in food prices and global commodity price risks. RBI Governor's decision is crucial post-elections.
RBI rate-setting panel starts deliberations on monetary policy, decision on Friday
The Reserve Bank of India's monetary policy committee (MPC) began a three-day meeting to determine the next monetary policy, with Governor Shaktikanta Das expected to announce the decisions on Friday. Analysts anticipate the continuation of the current interest rate, given persistent inflation concerns and improving economic growth.
RBI unlikely to cut interest rate on June 7, say experts
The Reserve Bank of India is unlikely to cut the benchmark interest rate in its upcoming monetary policy review amid inflation challenges and improving economic growth. Scheduled for June 5-7, the Monetary Policy Committee (MPC) is expected to maintain the current 6.5% repo rate. Experts cite steady economic conditions and ongoing inflation concerns as reasons for maintaining the status quo
RBI dividend will have economic dividends
RBI came into this windfall because of high interest rates in advanced economies, which may persist before an eventual cyclical inversion. The strength of India's recovery from the pandemic also contributed to the RBI surplus, and monetary policy would be inclined to pursue this course by easing interest rates ahead of the pack. Inflation is offering comfort on the demand side for an interest rate downcycle. Food inflation, less amenable to demand management, remains a concern.
GDP likely expanded 6.8% in Q4; FY24 print may hit 7.8%
The strong March quarter print could lift overall gross domestic product (GDP) growth for the full fiscal year to 7.8% against 7.6% assessed in the government's first advance estimates released in February. The International Monetary Fund (IMF) has also forecast 7.8% growth for FY24. The government will release fourth-quarter growth numbers and provisional GDP data for FY24 on May 31.
We need a clear future growth path to sustain momentum over the next 20-25 years: Neelkanth Mishra
Neelkanth Mishra emphasizes the need for proactive policies and strategic infrastructure development to sustain India's growth amidst evolving global economic challenges, advocating for efficient tax reforms, energy transition, and enhanced construction industry strategies to drive long-term economic prosperity. Mishra says: "At this stage, the problem is dollar shortages and higher rates and therefore the risks are the reverse, but the moment the Fed restarts QE, I think the problems will turn to be on the other side."
Govt's focus on infra development to nurture sustained revival in investment cycle: RBI report
According to the RBI's Monetary Policy Report- April 2024, domestic economic activity, backed by strong fundamentals, remained robust in the first half of 2023-24, weathering challenges from muted global demand.
Real interest rates need to climb before RBI's easing cycle begins
Ahead of this week's scheduled review meeting of the Monetary Policy Committee, market watchers and investors are keen to know the timeline for India's rate easing cycle. However, the texture - and driver - of India's robust economic growth rates suggest their wait will perhaps be of some duration.
All-tolerant Powell sends Wall Street into a buying frenzy
Wall Street debates Federal Reserve policy on asset prices. Traders allocate funds across markets. ETFs attract $374 billion during an unprecedented equity rally. S&P 500 surges 27%. Marketfield Asset Management criticizes inflation goal progress.
Asia shares strike seven-month high ahead of US jobs data
Japan remained an outlier as expectations mount that the Bank of Japan (BOJ) could finally exit negative interest rates this month. That lit a fire under the yen and sent domestic bond yields rising.
Indian economy to grow 6.8% in FY25, inflation to ease to 4.5%: Crisil
Crisil predicts India's economy will grow at 6.8% in the next fiscal year, maintaining its position as the fastest-growing large economy. Factors include a rise in private sector capex, but higher interest rates and reduced fiscal impulses may moderate growth from the estimated 7.6%. The report notes ongoing effects of rate hikes by the Reserve Bank of India and potential challenges from geopolitics, global recovery disparities, climate change, and technology disruptions.
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