Strategists say oil shock may push interest rates higher as bond markets adjust
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A global energy shock is driving a structural shift in interest rates, with bond markets adjusting to a higher neutral rate environment. The Reserve Bank of India may have to balance vigilance on inflation with support for growth due to crude-driven inflation risks and supply-side disruptions.
A global energy shock is causing a structural shift in interest rates. Bond markets are adjusting to a higher neutral rate environment. The Reserve Bank of India may need to balance inflation vigilance with growth support. Crude-driven inflation risks and supply-side disruptions are rising. The RBI is expected to remain broadly neutral on liquidity. Yields have adjusted sharply, with markets pricing in a gradual normalisation of rates over time.
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