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Below the Comments on US Fed Rate Cut, FOMC`s 25 bps Rate Cut 17th September 2025 by Mr. Vishal Goenka, Co-Founder of IndiaBonds.com

"The US Fed reduced benchmark interest rates by 25bps as expected with concerns on jobs slowdown but also highlighted that any inflationary effects in economic post Trump tariffs were yet to be played out. There was one dissent for 50bps cuts. The Fed is now expected to cut twice again this year by 50bps more according to forward dot plots provided by the committee members. 

This clearly paves the way for RBI also to move to cut rates given the slowdown in credit off take and to spur growth in the economy. Another reason is slow transmission of rates cuts so far in the banking system. This is due to the steep government bond yield curve as banks tend to borrow in the short term and lend for longer tenors for growth sectors. Addressing the steep curve by interest rate cuts and balancing of government securities issuance for short periods maturities could get the desired effect of lowering borrowing costs for companies and economy in general. 

Good time to be investing in bonds with expectation of further rate cuts this financial year."

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