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Below the Comment on RBI MPC by Mr. Sandeep Bagla, CEO, TRUST Mutual Fund

"Some would say that this rate cut by MPC/RBI is premature, that Inflation is not under control yet. Monetary easing is the need of the hour, from a trying to revive the economy perspective. For monetary easing to be effective, more rate cuts are needed for a long period of time. Liquidity needs to be easy as well. I feel that the inflation projection of 4.2% for FY26 is a tad optimistic. I expect further rate cuts of 50 bps during the year. It is a bold move by the RBI.
The short-term funds are likely to perform better. Long end of the curve will move lower once the inflation battle is won, which is some time away. There is pressure on currency as well, which will make interest rates volatile, though within a range."

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