InvestorQ : Is it correct that the US Fed could cut rates and if that happens, will the RBI also cut rates in India?
Archita Jajjoo made post

Is it correct that the US Fed could cut rates and if that happens, will the RBI also cut rates in India?

Answer
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Rashi Mehra answered.
6 months ago


That is what the international press is reporting. In fact, the sharp bounce in the Dow on 02 March was on these expectations only. The US Fed may be preparing to cut rates much sooner than expected as US bond yields appear to be indicating. US Bond yields on the benchmark 10-year bonds have fallen sharply in the last 1 month from 1.51% to 1.09%, one of the lowest levels it has seen in quite some time. The bond markets are clearly expecting the Fed to intervene and cut rates for now to ensure that the stock market carnage is arrested and the US does not slip into a slowdown. RBI may have its own constraints but if Fed cuts rates, RBI may follow. Indian bond yields have fallen from 6.80% to 6.35% in the last one month, probably indicative of a rate cut.