ETMarkets Smart Talk | Rate-cut cycle over, RBI may be at cusp of rate hikes; yields could inch higher: Puneet Pal
RBI moved higher in a monetary policy development for FY27.
· Economic Times Markets
PGIM India’s Puneet Pal expects India’s rate-cut cycle to end and policy rates to rise 50-75 basis points by FY27 amid higher crude and sticky inflation. He sees rising yields creating opportunities in high-quality corporate bond and target-maturity funds.
Key facts
- Period
- FY27
The analysis
RBI reported movement of -75 basis points for FY27. Those are the figures as filed — what moves the price is how they sit against what the market already expected, not their absolute size.
Because the driver here is macro rather than company-specific, the read-through is to index-level positioning rather than to any single name — correlations tend to rise when the whole market faces the same signal.
Why it matters
- Rate decisions ripple straight into banks, NBFCs and every rate-sensitive sector — from real estate to autos.
- With RBI involved, this carries a regulatory dimension that can outlast the immediate market reaction.
Market context
- This is a market-wide development — its reach goes beyond any single stock.
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