Effective rates now largely higher than repo rate

Effective rates now largely higher than repo rate

Mumbai: The Monetary Policy Committee has not officially raised interest rates for a year, but its novel stance of “focussing on withdrawal of accommodation” has led to much tighter financial conditions than the traditional rate hike stance of “calibrated tightening”, effectively delivering a rate hike without touching the policy rate. An analysis of the weighted … Read more

European Central Bank hikes interest rates for ninth time to combat inflation

European Central Bank hikes interest rates for ninth time to combat inflation

The European Central Bank raised interest rates for the ninth straight time in its yearlong campaign to stamp out painfully high inflation, even as worries about recession fuel speculation that Thursday’s hike could be its last. ECB President Christine Lagarde had all but promised the quarter-percentage point increase. That puts the focus at her post-meeting … Read more

Monetary tightening behind us; liquidity to remain key focus for RBI

Monetary tightening behind us; liquidity to remain key focus for RBI

After the RBI MPC paused monetary tightening in April 2023, although attempting to reinforce that the pivot is way off, the markets are bracing for the onset of the rate cuts sooner rather than later. The softer than expected inflation (particularly the recent moderation seen in the seasonally adjusted core inflation), above 1% real policy … Read more

Why the stock market keeps rallying, defying doom scenarios

Why the stock market keeps rallying, defying doom scenarios

A recession will torpedo stocks. Or banking turmoil. Or a government default, or falling earnings, or a too-aggressive Federal Reserve. Doom-saying is never in short supply when stocks are rallying. Lately, it’s reached fevered levels. Could all the pessimism be revving up price action that just pushed the S&P 500 to its highest level in … Read more

Record high temperatures in Feb may lead to more rate hikes from RBI, says India Ratings

Record high temperatures in Feb may lead to more rate hikes from RBI, says India Ratings

Mumbai: The record heat in February can lead to more rate hikes from RBI, a domestic rating agency said on Tuesday. The high temperatures will impact the wheat production, the rating agency said, adding that the surge in wheat prices contributed to over a tenth of the retail inflation in December and January, which is … Read more

Rate hikes to continue despite imminent slowdown

Rate hikes to continue despite imminent slowdown

While the fiscal second quarter growth may be just half of what it was in the first quarter, the central bank may not still put a brake on raising interest rates as price pressures continue. Economists have factored a lower growth for the September quarter at 6.5 percent compared to 13.5 percent in the June … Read more

US retail sales zoom higher, up 1% in June: government

US retail sales zoom higher, up 1% in June: government

US retail sales shot up one percent in June amid the ongoing surge in prices, rebounding after a pause in May, the government reported Friday. The increases were widespread, and sales were still up 0.7 percent even when gasoline is removed from the calculation, according to the Commerce Department data. The report showed an American … Read more

Rate hikes unlikely to dent demand for homes: Parekh

Rate hikes unlikely to dent demand for homes: Parekh

Mumbai: Property developers are unlikely to opt for sharp increases in prices because they recognise that outpricing home buyers and having large stocks of unsold inventory are counter-productive, Housing Development Finance Corp (HDFC) chairman Deepak Parekh said in his address to shareholders. “There has been consolidation and cleansing, so to speak, in the Indian real … Read more

India aims to achieve 60% of capex target by September to keep inflation at bay

India aims to achieve 60% of capex target by September to keep inflation at bay

The finance ministry has asked key infrastructure ministries and departments to speed up projects, setting a target of achieving at least 60% of the FY23 capital expenditure budget target by the end of September. North Block wants to push capital expenditure to support the economy buffeted by high inflation, geopolitical risk and monetary tightening. “We … Read more

June or August? Timing – and quantum – of rate hikes dominate D-Street chatter

June or August? Timing – and quantum – of rate hikes dominate D-Street chatter

Two months, a war in Europe’s eastern rim, and oil at 140 dollar a barrel: These data points seemed to have prompted policymakers in Ballard Estate to align themselves with other central bankers in their collective fight against the common foe –inflation. In February, before Vladimir Putin had ordered the invasion of Europe’s breadbasket to … Read more