Interest Rate Cuts: US, UK and India: Finance Trading Times

Interest Rate Cuts: US, UK and India

It seems to be an almost certainty, that there will be further rate cuts in US, UK and India. There are strong signals from Fed, Bank of England as well as Reserve Bank of India, that there may be interest rate cuts in the coming few weeks.

Yesterday, it was Ben Bernanke, The Fe Chairman, who set the outlook for the coming year, and clearly hinting that the Fed is very open to cut the rates further to help the struggling US economy recover from the so called fear of recession, which some experts believe is unavoidable. How bad the US economy is is clear from the measures taken by US government recently – offering a tax rebate, Warren Buffet making an offer to reinsure municipal bonds & Fed reveals plans to help mortgage defaulters - Just to name a few.

In UK, we have the same story. The Bank of England governor has already expressed deep concerns over the falling standards of living in UK due to substantial price rise in food and fuel costs. Reuters yesterday reported that there is a strong possibility of 2 more rate cuts by Bank of England to bring some clam to the struggling UK economy.

In the emerging markets, India’s Finance Minister and Reserve Bank of India Governor is giving strong signals for a rate cut. The expectations are that in March, there will be some relief from the growing interest rates. Though in a recent statement, the RBI governor had left the field open to the banks to battle it out and many banks in India have deducted their rates for house loan, car loan, etc.
But the latest signal is the fuels price hike by the Indian government. A rise of 4% in petrol (Rs. 2) is the strongest signal, that analysts believe, is sufficient enough to indicate the government is seriously considering a rate cut. Let’s see what goes on – expectations for rate cut are in March. Table of Contents
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3 Comments: Post your Comments

Curious said...(on 14 February 2008 at 20:59 )  

I am a regular reader of your excellent blog, and was just curious about you, how you manage to write so much and so informatively.

Can you share with us how much experience you have? (Are you one of us rookies, more or less fresh out of business school, or are you an old hand?)

Hope you don't mind my getting personal!

Anonymous said...(on 14 February 2008 at 22:47 )  

Hey Curious,

Wont it be a good idea to introduce yourself first before asking for so many details from Shobhit? Just by jotting down a name like "Curious" and getting into personal details of someone does not look good.

Are you fresh out of college?

Actually I am from US, can you tell me what do you mean by "one of the US rookies"???

Nilesh said...(on 15 February 2008 at 02:25 )  

"one of us rookies" -> us does not mean "USA". it is English word "us". i think he is asking if Shobhit is also newbie in finance like himself.

Wish you all happy and fruitful trading and investing activities with safety! = = = Post a Comment

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