Quote on Post MPC by Vikas Garg, Head – Fixed Income, Invesco Mutual Fund
Below the Quote on Post MPC by Vikas Garg, Head – Fixed Income, Invesco Mutual Fund
“Finally, a dovish pause after the previous two hawkish policies, and this time, the market was not surprised. Two members voted to change the stance to “Accommodative,” reflecting a split within the committee. The further sharp moderation in the inflation trajectory has opened the door for a rate cut, possibly the last one in this cycle. However, the currently resilient domestic economy gives the RBI time to assess the full impact of US tariff policies and the GST rate cut. FY26 inflation has been brought down to 2.6%, with Q2 and Q3 at 1.8% below the RBI’s lower threshold. A healthy monsoon and GST rate cuts bode well for the inflation outlook. FY26 GDP projections have been inched up to 6.8%, though this remains below potential. This dovish tilt will further boost expectations of a rate cut in the next monetary policy meeting and should help improve market sentiment. Currently elevated market yields, combined with low running inflation, offer a favourable risk-reward profile for investors.”
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