The Fed’s rate hike is both good news and bad for us but the latest US tariff threat is harder to defuse
Unfortunately for India, upped US rates raise the relative appeal of dollar-debt returns, as their rise squeezes the premium paid by rupee bonds, as seen in their rate gap. The US 10-year Treasury bond yields around 5% now, while India’s 10-year sovereign paper trades just under 7.1%. In general, such a narrow spread is observed to draw foreign money out of local assets, equities included.
