Retail Inflation has raised sharply to 7.35% in December 2019 from 5.54% in November 2019. It means a number of things. It means that food price inflation at 14% is just out of control. Secondly, it also means that rate cuts by RBI are ruled out for now and it is also possible that RBI may consider rate hikes if required. Thirdly, it is also a signal that real GDP growth could be much lower if real inflation is factored. Lastly, it could have implications for FII flows into debt. They prefer high real returns and today it is negative.